Ross Works for Houston Corporation,which Has a Contributory Defined Contribution

question 41

Multiple Choice

Ross works for Houston Corporation,which has a contributory defined contribution pension plan.The employer's monthly contribution to the plan is 8 percent of each participating employee's monthly salary,while the employee contributes only 6 percent.Ross's monthly salary is $3,000.Which of the following statements best describes the benefits of the plan?

• A)Houston receives a deduction for its contributions to the plan when Ross receives a distribution from the plan.
• B)While Ross is taxed on the employer's contributions to the plan,his own contributions are not taxed until he receives a distribution from the plan.
• C)Ross may deduct his own contributions to the pension plan,and Ross reports income from the plan each year until he receives distributions from the plan.
• D)The earnings on amounts contributed to the plan are not taxed to Ross until he retires or receives a distribution from the plan.

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Definitions:

Electrons

Negatively charged subatomic particles found in electron clouds around an atom's nucleus, playing a key role in chemical bonds.

Germanium

A chemical element with the symbol Ge and atomic number 32, a metalloid used in semiconductors and fiber optics.

Neutrons

Neutral particles found within an atom's nucleus, not possessing any electric charge and contributing to the atom's mass.

Cobalt

A chemical element with symbol Co, known for its magnetic properties and used in alloys, batteries, and as a pigment.