SMSF questions - 120 -Multiple choice questions - 4 options

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Question Description

Hi ,

I would reqire answers for those 120 multiple choice questions.

Each questions got 4 option

Unfortunately no feed back is provided to me - where I went wrong and what is the correct answer.

So require someone to help me out with the correct answers.

Thanks

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Question 1 Excess non-concessional contributions tax is payable by the member, however? Select one: the tax can be paid by the fund directly to the ATO. the tax must be paid by the member from personal savings. the fund is unable to release money to pay the assessment. the tax must be paid from the fund directly to the member. 1/43 Question 2 The contribution of a promissory note to an SMSF by a member would? Select one: breach the investment rules if it was acquired from a related party of the fund. not breach the investment rules if it was acquired from a related party of the fund as long as it is not a commodity in its own right. not breach the investment rules if the note is issued at a discount from its face value with the face value payable to the payee or bearer upon maturity. not breach the investment rules if the note can be traded on a secondary market. Question 3 Which of the following Structured Settlement Contributions needs to be reported via a Transfer Balance Event Notification form? Select one: a structured settlement contribution for $2m received on 1 November 2018 a structured settlement contribution of $1.8m received on 1 March 2006 a structured settlement contribution for $5m received on 1 August 2007 all of the above Question 4 CGT contributions in excess of the member's CGT cap count against? Select one: the member's concessional contribution cap the members non-concessional contribution cap the member's transitional employer ETP cap none of the above 2/43 Question 5 The trustees of an SMSF fund are permitted to accept? Select one: a voluntary employer contribution for a member regardless of their age. a mandated employer contribution for any member regardless of their age. an eligible spouse contribution for a member over age 70 who meets the work test. all of the above. Question 6 The following proceeds from the sale of an eligible small business can be contributed to an SMSF using the CGT cap? Select one: only the capital gain portion from the disposal of active assets that qualify for the 15-year asset exemption up to the cap value. only the capital gains portion from the disposal of active assets claimed under the CGT retirement exemption up to the cap value. all of the sale proceeds from the disposal of active assets that qualify for the CGT retirement exemption up to the cap value. all of the sale proceeds from the disposal of active assets that qualify for the CGT 15-year asset exemption up to the cap value. Question 7 If an excess contributions tax determination has been received, an application can be made to the Tax Commissioner to disregard a contribution for the purposes of the contribution caps? Select one: within 60 days of receiving the determination. by 30 June in the relevant financial year. at any time. none of the above. 3/43 Question 8 If an SMSF has not recorded the tax file number of a member? Select one: All member contributions must be refunded within 30 days. Only concessional contributions must be refunded within 30 days. Only non-concessional contributions must be refunded within 30 days. No contributions will be refunded if the TFN is received by 30 June. Question 9 Which of the following contributions are not impacted by the member's total superannuation balance? Select one: Member's non-concessional contributions Member's concessional contributions Member's bring forward non-concessional contributions Member's catch up concessional contributions Question 10 Certain contributions are tax free and are excluded from the nonconcessional contribution caps. Which of the following contributions are both excluded from the nonconcessional cap and excluded from the total superannuation balance calculation? Select one: Downsizer contributions CGT contributions Spouse contributions Structured settlement contributions 4/43 Question 11 A member of an SMSF has provided her TFN to the trustees and is 66 on 25 December 2016 and continues to work full-time. Her contribution history shows a $180,000 non-concessional contribution in 2015/16 and a $180,000 nonconcessional contribution in 2016/17. How much can she contribute as a non-concessional contribution in 2017/18? Select one: Up to $100,000 Up to $180,000 Can no longer make any non-concessional contributions Up to $300,000 Question 12 A contribution that a member of an SMSF elects to be covered by the CGT cap must be contributed to the fund by? Select one: 30 June in the financial year in which the CGT event occurred. the day the member is required to lodge a tax return for the financial year in which the CGT event occurred. the later of the day the member is required to lodge a tax return for the relevant financial year or 30 days after receipt of the proceeds but not later than two years after the sale. 30 days after receipt of the proceeds but not later than two years after the sale. Question 13 You would not be able to wind up an SMSF if? Select one: the fund held listed securities that were currently suspended. the Trustees were restricted from selling or redeeming frozen assets. the fund held illiquid assets such as property. the fund bank account is still open. 5/43 Question 14 The final annual return lodged with the ATO for an SMSF that has wound up must be kept? Select one: for 5 years from the date of lodgement. until the final Notice of Assessment is issued. for 10 years from the date of lodgement. for 7 years from the date of lodgement. Question 15 In which of the following cases would a fund definitely cease to be an SMSF? Select one: If a fifth member was admitted to the fund. If one of the members became a bankrupt. If one of the members was convicted of serious tax avoidance. If the fund breached the sole purpose test. Question 16 Which of the following is true of an SMSF which is already wound up? Select one: The ATO can only levy penalties for breaches that occurred in the six months prior to wind up. The ATO's power to deal with a contravention is not affected by the wind up The ATO has no powers to levy penalties for breaches that occurred prior to the wind up. The ATO has no powers to disqualify former members of the fund. Question 17 Which of the following is not an option for the sole member of an SMSF that no longer wishes to be a trustee? Select one: Nominate a regulated fund to roll their benefits to. Investing all the money in the fund into a wrap account in their name. Nominate a bank account to have their benefits paid into if they meet a condition of release. Arrange for an RSE licensee to be appointed as the fund trustee. 6/43 Question 18 When an SMSF is being wound up the ATO needs to be notified? Select one: once the accountant has d the wind up. when the tax returns are lodged with the ATO. within 28 days of winding up the fund. within 60 days of winding up the fund. Question 19 An SMSF is wound up when? Select one: the Trustees have fulfilled all the steps required in the Trust deed for the fund to be wound up. the ATO issues a notice stating that the fund is wound up. the ATO cancels the fund's ABN all the benefits in the fund have been paid out. Question 20 An SMSF would be required to wind up if? Select one: the value of its net assets was NIL a member became a disqualified person subsequent to joining the fund. all members elected to roll their benefits over to another superannuation fund. the trust deed stated the fund must be wound up if there were no trustees. Question 21 If a fund trustee is a company? Select one: The ABN is to be cancelled after deregistration It must be wound up at the time of winding up A dual purpose Constitution may require a Director's Resolution It must be deregistered by ASIC 7/43 Question 22 Upon failing to meet the definition of SMSF in the SIS Act how long will a fund continue to be treated as an SMSF? Select one: none, it will not be an SMSF immediately upon failing to meet the definition in all circumstances. the period specified by the ATO in response to an application by the Trustees. one year if no RSE licensee is appointed. six months if no RSE licensee is appointed. Question 23 An SMSF will satisfy the central management and control test? Select one: if 50% of the trustees are Australian residents. if strategic decisions of the fund are made by Australian resident trustees. if the trustees permanently relocate to an overseas country. for up to two years after the non-resident trustees have moved overseas. Question 24 If an SMSF has active members it will satisfy the "active member test" if? Select one: 50% or more of benefits in the fund are for Australian active resident members. 50% or more of the total accumulated entitlements in the fund belong to resident active members. 50% or more of the total accumulated entitlements in the fund belong to nonactive Australian residents. 50% or more of contributions in a year are made by Australian active resident members. 8/43 Question 25 To be a complying superannuation fund for tax purposes, an SMSF must, among other things, always be an "Australian superannuation fund" (within the meaning in s 295-95(2) of the Income Tax Assessment Act 1997 (ITAA 1997)) and meet the active member test. Regarding the active member test, which of the following is correct? Select one: where the fund has active members, at least 50% of all active members' contributions are attributable to active members who are not Australian residents. where the fund has active members, at least 50% of all active members' contributions are attributable to active members who are Australian residents. the fund has either no active members or, if there is an active member, at least 50% of all active members' assets (either based on market value or the value payable to the members) are attributable to active members who are Australian residents. none of the above Question 26 An SMSF has 2 members. One of the members has worked overseas for the past four years and the other member has a zero balance in the fund. The sole investment of the SMSF is a frozen mortgage fund which means the fund has no cash flow to pay ongoing expenses? Select one: For the member who is overseas to make contributions to the other member’s account to liquidity to cover fund costs for accounting, taxation reporting and income tax provisioning. The sole resident trustee contributes to his "zero" member account to increase liquidity to cover costs for accounting, taxation reporting and income tax provisioning. The member with the only positive member balance, renew active member status and make contributions to cover the expenses. Transfer the fund to a small APRA fund and make sufficient contributions to cover expenses. 9/43 Question 27 An SMSF is a complying superannuation fund for tax purposes if it is a complying superannuation fund in the SIS Act. Under s19(1), the fund must be a resident regulated superannuation fund. Regarding tests to ensure residency, which of the following statements is NOT correct? Select one: The fund was established in Australia and all assets of the fund are situated in Australia The central management and control of the fund is ordinarily in Australia For the year of income the fund meets the active member test The fund was established in Australia or at least one asset is located within Australia Question 28 Justin and Anna are trustees of the “ABC SMSF” which was established in January 2018. Just after the SMSF was established, Justin accepted a 2 year role in Singapore to oversee the launch of a telecommunications company. Anna has her own business which she operates via the internet. Justin and Anna rented out their home and retained their existing investments in Australia with the intention of returning home. During their absence, they held regular trustee meetings in their Singapore home and some at the Qantas club meeting rooms. Minutes have been made and decisions acted upon, mostly by the more experienced investor – Justin. Due to delays in the telecommunications launch, Justin has been required to extend his stay in Singapore for another 6 months. Based on the facts of this case, the central management and control? Select one: May be maintained in Australia as the initial intention was for the trustees of the SMSF to leave Australia for no more than two years and is still only temporary. Is not maintained in Australia as the trustees of the fund have been absent from Australia for more than two years Is not maintained in Australia as investment decisions were made whilst the trustees were outside Australia. None of the answers are correct 10/43 Question 29 Which of the following SMSF strategies main aim is to seek to reduce taxes? Select one: Re-contribution strategy Anti-detriment payments Fund reserves Multiple pensions Question 30 If a SMSF is deemed to be a non-resident fund it is subject to tax at the rate of? Select one: 15% on income generated from Australian investments and 45% on income generated from foreign investments 45% on its taxable income 15% on the low rate component and 45% on the non-arm's length component 0% if 100% of the taxable income was generated by investments held to support a pension Question 31 The Trust Deed of an SMSF contains a prescribed form allowing members to make a written nomination directing the trustees to pay the benefit in accordance with the nomination. The prescribed nomination form allows the member to specify any individuals as beneficiaries of the death benefit and allows the member to direct the form in which the benefit is paid (i.e. as an income stream or lump sum). The nomination form must be signed in the presence of one witness. Which of the following statements is correct? Select one: The nomination form is not binding because it potentially allows the member to nominate someone precluded from receiving a death benefit under the operating standards The nomination form may bind the trustee, depending on the circumstances at the time of the member’s death The nomination form will not bind the trustee, as it does not require two witnesses The nomination form will be binding, but not to the extent that it specifies the form of the benefit (i.e. income stream or lump sum) 11/43 Question 32 TFN withholding applies to income generated by SMSF investments unless? Select one: the SMSF’s TFN is provided to the investment body the TFN of each individual trustee or corporate trustee director is provided to the investment body the value of the investment is below $50,000 the investment body is notified that the investments are for an SMSF so the requirement to quote a TFN does not apply Question 33 To calculate exempt current pension income, you? Select one: exclude assessable contributions only excludes non-arm's length income and assessable contributions must obtain an actuarial certificate include all ordinary income and statutory income if it is 100% in pension phase Question 34 Which of the following SMSFs would be able to continue to segregate its assets, and not require an Actuarial Certificate for ECPI purposes beyond 30 June 2017? Select one: Simon has a retirement phase interest of $1m in the SMSF and $1m in a retail super fund and Janet has a retirement phase interest of $1m in the SMSF. Simon has an accumulation interest of $2m and Janet has a retirement phase interest of $1m, both in the SMSF . Simon has an accumulation interest of $1m in the SMSF and $1m retirement phase interest in a retail fund and Janet has a $1m retirement phase interest in the SMSF. Simon has a retirement phase interest of $2m and Janet has an accumulation phase interest of $1m, both in the SMSF. 12/43 Question 35 In a financial year in which 100% of the investments of a SMSF are segregated current pension assets, any capital gains are? Select one: taken up in the CGT schedule to the extent that they reduce carry forward capital losses to $Nil included in the fund’s taxable income but subject to a tax rate of 0% not taxable but are recorded in the self managed superannuation fund annual return and will be subject to tax in the future if the fund ceases to be 100% segregated ignored altogether and not included in the self managed superannuation fund annual return Question 36 If a SMSF realises a capital loss from selling shares that are not segregated current pension assets they can? Select one: take this amount up as a tax deduction to offset against any assessable income take this amount up as a tax deduction to offset against any assessable contribution income only offset this amount against capital gains generated by the fund and carry forward any residual amount to be offset against future capital gains offset this amount against capital gains generated by the fund in the year in which the loss arises only Question 37 The Member Information section of the self-managed superannuation fund annual return? Select one: separately discloses the taxable and tax free components making up each member’s balance must be d for all members of the fund only needs to be d for members who received contributions during the year includes a calculation of the excess contributions tax payable by each member 13/43 Question 38 A retirement phase individual with a total superannuation balance that exceeds $1.6 million impacts an SMSFs ability to? Select one: accept downsizer contributions make CGT cap contributions segregate assets for ECPI purposes invest via a limited recourse borrowing arrangements Question 39 Generally, the rate of tax payable by a complying resident SMSF is? Select one: 15% on ordinary income and 10% on net capital gains. 45% on the low tax component 15% on the low tax component 0% if 100% if the taxable income was generated from investments held to support a pension Question 40 The tax rate on non-arm's length income that is received by an SMSF is? Select one: 0% 45% 15% 31.5% Question 41 In order for an SMSF to be permitted to purchase a widely held unit trust from a member it must be? Select one: purchased pursuant to an employee share scheme. acquired at market value. a listed security. purchased for an amount within the 5% in-house asset limit. 14/43 Question 42 An SMSF must not intentionally acquire an asset from? Select one: any Part 8 associate of a member or a standard employer-sponsor. a related party of the fund. any employer-sponsor of the fund. any member of the fund including those drawing pensions from the fund. Question 43 The market value of assets as recorded in an SMSF's financial accounts and statements needs to be substantiated by? Select one: A valuation from a qualified independent valuer A valuation from the fund's auditor Valuations from two experts in the field Objective and supportable data Question 44 A partial interest in a business real property owned by a member cannot be purchased by an SMSF? Select one: if it is held under strata title. if there are fixtures attached to the land at the time of acquisition. if it is held as joint tenants with the member. if it is held as tenants in common with the member. Question 45 When considering the s.66 business real property exception, a business does not include? Select one: not for profit enterprises an occupation as an employee primary production enterprises any profession, trade, employment, vocation or calling carried on for the purposes of profit 15/43 Question 46 Under Regulation 13.18AA for personal use assets, the definition of a “qualified independent valuer” is? Select one: Anyone with suitable knowledge and experience about the asset which is the subject of the transaction Anyone not related to the member and who has specific knowledge about the asset which is the subject of the transaction Someone who is considered to have specific knowledge, experience and judgement by their particular professional community None of the above Question 47 The purchase of residential property ...
Purchase answer to see full attachment

Tutor Answer

MoTutor
School: University of Virginia

Hello, i have sent the answers.kindly confirm and in case of anything let me now.Thanks and good luck for now.

1

Name
Institution
Date

2

1. the tax can be paid by the fund directly to the ATO
2. breach the investment rules if it was acquired from a related party of the fund
3. a structured settlement contribution for $5m received on 1 August 2007
4. the member's concessional contribution cap
5. all of the above.
6.

all of the sale proceeds from the disposal of active assets that qualify for the CGT
retirement exemption up to the cap value.

7. within 60 days of receiving the determination.
8.

Only non-concessional contributions must be refunded within 30 days

9. Member's non-concessional contributions
10. CGT contributions
11. Up to $300,000
12. the later of the day the member is required to lodge a tax return for the relevant financial
year or 30 days after receipt of the proceeds but not later than two years after the sale
13. the fund held listed securities that were currently suspended.
14. until the final Notice of Assessment is issued
15. If one of the members became a bankrupt
16. The ATO's power to deal with a contravention is not affected by the wind up
17. Nominate a bank account to have their benefits paid into if they meet a condition of
release
18. within 60 days of winding up the fund.
19. the ATO cancels the fund's ABN
20. the trust deed stated the fund must be wound up if there were no trustees
21. A dual purpose Constitution may require a Director's Resolution

3

22. six months if no RSE licensee is appointed.
23. if the trustees permanently relocate to an overseas country
24. 50% or more of the total accumulated entitlements in the fund belong to resident active
members
25. where the fund has active members, at least 50% of all active members' contributions are
attributable to active members who are not Australian residents.
26. The sole resident trustee contri...

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