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:

BMI

Body Mass Index, a measure of body fat based on height and weight that applies to adult men and women.

Overweight

Having a body weight more than what is considered normal or healthy for a specific height, often measured by the body mass index (BMI).

Lexical Decision

A task in cognitive psychology where participants must decide as quickly as possible whether a string of letters is a real word or a non-word.

Fragment Completion

A technique or task used in cognitive and psychological assessments where an individual must complete or recognize incomplete stimuli, often used to measure memory or perception.