When a Taxpayer Receives a Nonqualified Distribution from a Roth

question 129

True/False

When a taxpayer receives a nonqualified distribution from a Roth 401(k)account the taxpayer contributions are deemed to be distributed first. If the amount of the distribution exceeds the taxpayer contributions, the remainder is from the account earnings.

---

Definitions:

Bond Ratings

These are assessments provided by credit rating agencies on the creditworthiness of bond issuers, indicating the risk level of bonds defaulting.

Moody's Baa

Moody's Baa rating denotes bonds that are considered medium-grade, subject to moderate credit risk, and as such, investors should investigate further.

S&P's BBB

A credit rating by Standard & Poor's that indicates an investment grade with moderate credit risk.

Bond Ratings

A system used to assess the credit quality and risk level of bonds, typically assigned by rating agencies.