Which of the Following Best Describes Distributions from a Traditional

question 68

Multiple Choice

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

• A) Distributions from defined contribution plans are fully taxable to the recipient as ordinary income.
• B) Distributions from defined contribution plans are partially taxable to the recipient as ordinary income and partially nontaxable as a return of capital.
• C) Distributions from defined contribution plans are fully taxable to the recipient as long-term capital gains.
• D) Distributions from defined contribution plans are partially taxable to the recipient as capital gains and partially nontaxable as a return of capital.

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Definitions:

Proportion of Employee

A ratio or fraction that represents the number of employees in a particular category relative to the total number of employees.

Commute by Car

The act of traveling between one's home and workplace or school by automobile.

Confidence Interval

A range of values, derived from statistical analysis, that is likely to contain the true value of an unknown parameter with a certain level of confidence.

Incentive Program

A plan or approach aimed at promoting certain behaviors or activities by providing incentives or advantages.