Which of the Following Best Describes Distributions from a Defined

question 74

Multiple Choice

Which of the following best describes distributions from a defined benefit plan?

• A)Distributions from defined benefit plans are taxable as ordinary income.
• B)Distributions from defined benefit plans are partially taxable as ordinary income and partially nontaxable as a return of capital.
• C)Distributions from defined benefit plans are taxable as capital gains.
• D)Distributions from defined benefit plans are partially taxable as capital gains and partially nontaxable as a return of capital.

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Definitions:

Salaries Earned

Compensation that employees have earned during a specific period but have not yet been paid.

Workweek

A fixed, recurring period used to measure a worker's or business's hours worked, often consisting of five to seven consecutive days.

Accounting Period

A specific time frame in which financial transactions are recorded and financial statements are prepared, typically a year or a quarter.

Prepayment

Payments made in advance for goods or services, recorded as an asset until the corresponding goods or services are received.