Which of the Following Is Provided by a College Savings

question 115

Multiple Choice

Which of the following is provided by a college savings plan?

• A) Tax-deferred growth on earnings, only.
• B) Tax-free distributions if the money is used for qualified educational expenses such as tuition, fees, books, equipment, housing, meal plans, and other necessary expenses, only.
• C) Both tax-deferred growth on earnings and tax-free distributions if the money is used for qualified educational expenses such as tuition, fees, books, equipment, housing, meal plans, and other necessary expenses.
• D) Taxed at the child's marginal tax bracket.

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Definitions:

Double-Declining-Balance

An accelerated depreciation method that doubles the regular depreciation rate, reducing the asset's value more quickly.