Jason Just Quit His Current Job

question 171

Multiple Choice

Jason just quit his current job.He has $13,000 vested in that 401(k) plan.Which of the following is true?

• A) If Jason takes the money and spends it,he will have to pay taxes and penalties on all $13,000.
• B) If Jason takes the money and reinvests it in an IRA,the employer will write him a check for $13,000.
• C) If Jason arranges a transfer of funds from his employer directly to his IRA trustee,his employer will withhold 20%.
• D) a and b
• E) a,b,and c

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Definitions:

Machinery

Industrial or commercial equipment designed to perform specific tasks, often part of the manufacturing or production process.

Federal Income Tax

A tax levied by the federal government on the annual income of individuals, corporations, trusts, and other legal entities.

Depreciating Assets

Assets whose value decreases over time due to use, wear and tear, or obsolescence.

Plant Asset

Physical assets with a long lifespan that are employed in business operations without the purpose of being sold, including equipment and structures.