Practice Quiz

FINRA Series 6

Category - Series 6

Start a Study Session Sign up for Question of the Day
Which of the following statements regarding profit-sharing plans is false?
  1. A profit-sharing plan must stipulate a minimum employer contribution that will be made, even in less profitable years.
  2. The employer can deduct contributions made to a profit-saving plan, within specific guidelines.
  3. The withdrawals made by an employee from a profit-sharing plan are taxable as ordinary income.
  4. Employees are not permitted to make contributions of their own to a profit-sharing plan.
Explanation
Answer: A - The false statement is that a profit-sharing plan must stipulate a minimum employer contribution that will be made, even in less profitable years. Under a profit-sharing plan, the employer need make no contribution whatsoever if the firm has had a bad year.
Was this helpful? Upvote!
Login to contribute your own answer or details
Start a Study Session Sign up for Question of the Day

Top questions

Related questions

Most popular on PracticeQuiz