Mr Scott, Age 46, Quit His Job with MNP Inc

question 36

Multiple Choice

Mr Scott, age 46, quit his job with MNP Inc. and withdrew the $184,000 balance in his Section 401(k) plan. Mr Scott immediately deposited the withdrawal in a new rollover Roth IRA with a local bank. Which of the following statements is false?

• A) Mr. Scott must include the $184,000 withdrawal in gross income.
• B) Mr. Scott must pay a 10% premature withdrawal penalty.
• C) Future withdrawals from the rollover Roth IRA will be nontaxable.
• D) None of the statements is false.

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Definitions:

Minimum Wage

The lowest legal hourly rate that employers can pay workers, established to protect workers from unduly low compensation.

Inelastic Demand

A situation where the demand for a product or service does not significantly change in response to price changes.

Teenage Workers

Young individuals, typically aged 13 to 19, employed in various jobs, often part-time or during school breaks.

Cross Elasticity

A measure of how the demand for one good responds to a change in the price of another good.