Which of the Following Statements Regarding the Qualified Tuition Plans

question 84

Multiple Choice

Which of the following statements regarding the qualified tuition plans (QTP) is incorrect?

• A)Distributions can be made tax-free to pay for room and board at college.
• B)Distributions made from a QTP for college tuition will be tax-free in addition to qualifying for the American Opportunity credit or lifetime learning credit.
• C)Katie's parents had established a QTP for Katie,but she has received a "full-ride" scholarship.Katie's parents can name her sister as a replacement beneficiary of the QTP.
• D)Distributions of income not used for qualified higher education expenses are taxable and subject to a 10% penalty.

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Definitions:

International Police Power

The assertion of a nation's authority beyond its borders, often to protect its own interests or to maintain international peace and security.

Western Hemisphere

The half of the Earth that lies west of the Prime Meridian (which crosses Greenwich, London) and east of the antimeridian, encompassing the Americas.

Military Operations

Activities and actions conducted by armed forces to achieve specific strategic objectives, often involving combat and non-combat maneuvers.

Economic Environment

The totality of economic factors, such as employment, income levels, and inflation, that influence the disposal income and spending patterns of a society.