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Finra Exam Series-6 Topic 7 Question 65 Discussion

Actual exam question for Finra's Series-6 exam
Question #: 65
Topic #: 7
[All Series-6 Questions]

Which of the following statements regarding the tax treatment of variable annuity contracts is false?

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Suggested Answer: D

Only the 16-year-old entrepreneur is not permitted to open an investment account. As a minor, he is not a legal person. All the other selections are legal persons and can establish investment accounts.


by Annelle at Oct 05, 2023, 06:08 PM

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Hollis
2 months ago
As a tax accountant, I can confirm that option D is the correct answer. The 10% penalty only applies to qualified retirement plans, not variable annuities.
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Gwenn
2 months ago
Option A is clearly the false statement. Earnings on variable annuities are definitely taxed during the accumulation phase, just not when the money is withdrawn.
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Blondell
2 months ago
Haha, the IRS always finds a way to get their hands on our money, don't they? This question is making my head spin!
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Lai
26 days ago
Alyce: Definitely, gotta be careful with those withdrawals.
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Alyce
27 days ago
User 2: I know, it's like they want a piece of everything.
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Nada
29 days ago
User 1: Yeah, the tax rules can be tricky.
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Jame
3 months ago
This is tricky, but I believe the answer is D. A 10% penalty for withdrawals before age 62 sounds like the false statement here.
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Buddy
1 months ago
C) If an investor opts to receive regular payments of a specific amount -i.e., annuities-part of each payment will be considered repayment of principal and will not be subject to taxation.
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Katina
1 months ago
B) If an investor opts to make a random, partial, lump sum withdrawal, the entire amount of the withdrawal will be taxed as ordinary income to the investor.
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Maryanne
2 months ago
A) Earnings on the contributions to a variable annuity are not taxed during the accumulation phase.
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Melita
3 months ago
Option B seems incorrect to me. I thought partial withdrawals were taxed based on the proportion of contributions and earnings, not the entire withdrawal.
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Jerilyn
2 months ago
C) If an investor opts to receive regular payments of a specific amount -i.e., annuities-part of each payment will be considered repayment of principal and will not be subject to taxation.
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Margurite
2 months ago
B) If an investor opts to make a random, partial, lump sum withdrawal, the entire amount of the withdrawal will be taxed as ordinary income to the investor.
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Brunilda
2 months ago
A) Earnings on the contributions to a variable annuity are not taxed during the accumulation phase.
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Kattie
3 months ago
Why do you think that?
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Annamaria
3 months ago
I disagree, I believe the false statement is option D.
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Kattie
3 months ago
I think the false statement is option A.
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