SIE Exam Question 740: Answer and Explanation

Question: 740

If an individual contributes more to an IRA than is permitted, the excess contribution is subject to which of the following taxes?

  • A. 5% excise tax
  • B. 6% excise tax
  • C. 10% excise tax
  • D. 15% excise tax

Correct Answer: B

Explanation:

If an individual contributes more to an IRA than is permitted, the excess contribution is subject to a 6% excise tax.

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