Which of the Following Statements Is True Regarding Taxpayers Receiving

question 59

Multiple Choice

Which of the following statements is true regarding taxpayers receiving distributions from traditional defined contribution plans?

• A) A taxpayer who retires at age 71 in 2017 is required to pay a minimum distribution penalty if she does not receive a distribution in 2017.
• B) Taxpayers are not allowed to deduct either early distribution penalties or minimum distribution penalties.
• C) The minimum distribution penalty is 30% of the amount required to have been distributed.
• D) A taxpayer who receives a distribution from a retirement account before she is 55 years old is subject to a 10% penalty on both the distributed and undistributed portions of her retirement account.

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Definitions:

Long Run Adjustment

The process through which firms adjust their levels of production, capital, and other inputs to reach a new equilibrium in response to changes in market conditions over time.

Organic

Refers to products, especially food or farming methods, that are produced or conducted without the use of synthetic chemicals, fertilizers, or genetically modified organisms.

Profit

The financial gain realized when the amount of revenue gained exceeds the expenses, costs, and taxes involved in sustaining the activity in question.

Long Run Equilibrium

A state in an economy in which all factors of production and inputs can be varied, allowing firms to make adjustments and leading to the normalization of prices and output.