Which of the Following Statements Regarding the Qualified Tuition Plans

question 32

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 the 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:

Biological Needs

Fundamental requirements that serve to maintain the basic functioning and survival of an organism, including food, water, shelter, and air.

Shaping

A method of behavior training in which successive approximations of the desired behavior are reinforced until the exact behavior is achieved.

Negative Reinforcement

A behavior modification technique where an unpleasant or aversive stimulus is removed following a desired behavior, increasing the likelihood of that behavior being repeated.

Modelling

A method used in cognitive behavior therapy and social learning theory where individuals learn through observing and imitating others.