Which of the Following Statements Regarding the Qualified Tuition Plans

question 84

Multiple Choice

Which of the following statements regarding the qualified tuition plans (QTP) is incorrect?

• A)Distributions can be made tax-free to pay for room and board at college.
• B)Distributions made from a QTP for college tuition will be tax-free in addition to qualifying for the American Opportunity credit or lifetime learning credit.
• C)Katie's parents had established a QTP for Katie,but she has received a "full-ride" scholarship.Katie's parents can name her sister as a replacement beneficiary of the QTP.
• D)Distributions of income not used for qualified higher education expenses are taxable and subject to a 10% penalty.

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Definitions:

Condorcet Paradox

The Condorcet Paradox describes a situation in voting theory where collective preferences can be cyclical, even if individual preferences are not, leading to a lack of clear majority preference.

Pairwise Vote

A voting system where candidates are compared and voted on in pairs, with the winner being the one who wins the most direct comparisons.

Unanimity

A condition in decision-making where all members of a group fully agree on a specific decision or outcome.

Independence of Irrelevant Alternatives

A decision-making principle asserting that the relative preference between two options should not be affected by the introduction of a third irrelevant option.