Which of the Following Statements Regarding the Qualified Tuition Plans

question 32

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 the 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:

Stroke

A medical condition that occurs when the blood supply to part of the brain is interrupted or reduced, causing brain cells to die, which can lead to lasting brain damage, long-term disability, or death.

Inherent Risk Factors

Risk factors that are intrinsically linked to an individual or situation, not influenced by external changes.

Diet

The combination of foods and beverages a person consumes, which impacts health, body weight, and disease risk.

Exercise

Physical activities performed to improve health, fitness, and overall well-being.