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:

Acceptance

In contract law, it is the expression of assent to the terms of an offer in such a manner that binds both the offeror and offeree to a contract.

Legal Power

The authority granted by law to individuals or entities to carry out legal actions.

Grumbling Acceptance

An acceptance of a situation or outcome with complaints or signs of unhappiness.

Objectively Demonstrated

Information or evidence presented in a manner that is observable and verifiable by others, not influenced by personal feelings or opinions.