Series 65 Taxes, Retirement & Estates Practice Questions
Taxes, Retirement & Estates makes up 6 of every 50 questions on a Tigertest Series 65 practice test. Here are 10 of the 24 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on NASAA's Series 65 test specifications. Original questions; 50 per test, weighted like the real 130-question exam. Not affiliated with NASAA or FINRA.
1. A client bought a fund for $14,000 eleven months ago and sells it today for $17,500. The gain is:
- A.Long term, since it beat inflation
- B.Short term, at ordinary rates
- C.Long term, at capital gains rates
- D.Tax-free if reinvested
Answer: B. Assets held one year or less produce short-term gains, taxed at ordinary income rates. Waiting past one year would have made the $3,500 gain long term.
2. A father gives his daughter stock he bought for $8,000. It is worth $31,000 on the day of the gift. Her cost basis for figuring a gain is:
- A.$23,000
- B.$19,500
- C.$31,000
- D.$8,000
Answer: D. A gift of appreciated property carries over the donor's basis, so her basis is his $8,000 and the $23,000 of built-in gain is taxed when she sells. Had she inherited the stock instead, her basis would step up to its value at his death.
3. An aunt paid $40,000 for stock and gives it to her niece when it is worth $30,000. The niece later sells it for $26,000. Her deductible loss is:
- A.$4,000
- B.None
- C.$14,000
- D.$10,000
Answer: A. When gifted property is worth less than the donor's basis, the basis for figuring a loss is the value on the gift date, $30,000. $30,000 - $26,000 = $4,000; the aunt's $10,000 drop is never deductible.
4. Which client is most likely to owe alternative minimum tax?
- A.One with only Roth withdrawals
- B.One with a small pension
- C.One with large ISO exercises
- D.One with only wage income
Answer: C. The ISO spread at exercise is an AMT preference item, so large exercises often trigger AMT even though regular tax is zero on them.
5. A client turned 73 in 2026 and holds a traditional IRA. Under SECURE 2.0, she must:
- A.Convert it all to a Roth
- B.Stop all contributions
- C.Begin taking RMDs
- D.Close the account
Answer: C. SECURE 2.0 set the RMD starting age at 73 for people born from 1951 through 1959. Missing an RMD triggers an excise tax on the amount not taken.
6. IRMAA, the income-related monthly adjustment amount, raises a client's:
- A.Medicare premiums
- B.IRA contribution limit
- C.Estate tax exemption
- D.Social Security benefits
Answer: A. Higher-income Medicare enrollees pay IRMAA surcharges on Part B and Part D premiums, based on income from two years earlier. A large IRA withdrawal or Roth conversion can trigger it.
7. A married client leaves her entire estate to her husband, a U.S. citizen. The federal estate tax due is generally:
- A.Paid by the husband at a lower rate
- B.Due on the excess over her exemption
- C.Due within nine months in full
- D.Zero, under the marital deduction
Answer: D. The unlimited marital deduction lets a spouse pass any amount to a U.S. citizen spouse free of estate tax. Portability can then pass her unused exclusion to him.
8. Portability in the federal estate tax lets a surviving spouse:
- A.Skip all gift tax returns
- B.Claim the unused exclusion
- C.Avoid probate entirely
- D.Inherit an IRA as her own tax-free
Answer: B. Portability lets the survivor add the deceased spouse's unused exclusion amount (DSUE) to her own, if elected on a timely estate tax return.
9. A client wants tax-deductible contributions now and will be in a much lower bracket in retirement. Which account fits best?
- A.Coverdell ESA
- B.Traditional IRA
- C.Roth IRA
- D.Taxable brokerage account
Answer: B. Deducting contributions at a high rate and paying tax on withdrawals at a lower rate later favors a traditional IRA. A Roth wins when the later rate is higher.
10. Which is true of a Roth IRA for its original owner?
- A.Earnings are always taxable
- B.RMDs begin at age 73
- C.Contributions are tax-deductible
- D.It has no lifetime RMDs
Answer: D. Roth IRA owners never have to take RMDs during their lifetime. Qualified withdrawals of earnings are tax-free after five years and age 59 1/2.
Practice all 24 taxes, retirement & estates questions, and the rest of the 200-question bank, in the free Series 65 training sets. Questions you miss come back until you have mastered them.
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