Cathy Lyons Has Been Receiving a $100 Monthly Annuity from Her

question 22

Multiple Choice

Cathy Lyons has been receiving a $100 monthly annuity from her qualified plan account over several years. At the end of the current year, her account balance is $100,000, including a $20,000 cost basis. In order to satisfy a personal obligation, she withdraws an extra $5,000 from her account in the current year. fte withdrawal does not affect the amount of her subsequent annuity payments. How much of the $5,000 distribution is taxable?

• A) $0
• B) $1,000
• C) $4,000
• D) $5,000

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Definitions:

Observational Learning

Learning that occurs by observing the behavior of others and the outcomes of those behaviors, without direct experience.

Vicarious Conditioning

A process of learning through observing the consequences of another's actions, which then influence the observer's own behavior.

Attitude Polarization

The phenomenon where a disagreement becomes more extreme as the opposing parties continue to consider evidence and arguments.

Open-Minded

Willing to consider different ideas or opinions without prejudice.