Which of the Following Statements Regarding the Qualified Tuition Plans

question 37

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 education expenses are taxable and subject to a 10% penalty.

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