Just Like Distributions from Qualified Retirement Plans, Distributions from Nonqualified

question 36

True/False

Just like distributions from qualified retirement plans, distributions from nonqualified deferred compensation plans are taxed as ordinary income to the recipient.

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Definitions:

Indirect Method

A method often used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions and changes in working capital.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, also known as net earnings or net profit.

Noncash Expense

Expenses that do not directly result in a physical outflow of cash but are recorded in the accounting records, such as depreciation.

Depreciation

The methodical distribution of the expense of a physical asset across its lifespan.