Question

Which of the following best describes distributions from a defined benefit plan? A. Distributions from defined benefit plans are taxable as ordinary income.
B.Distributions from defined benefit plans are partially taxable as ordinary income and partially nontaxable as a return of capital.
C. Distributions from defined benefit plans are taxable as capital gains.
D.Distributions from defined benefit plans are partially taxable as capital gains and partially nontaxable as a return of capital.

Answer 1

Answer:

The answer would be A

Explanation:

Qualified plans provide two important tax benefits that are not available in other types of investments.

Tax rates will be higher in future years, but the benefits of the tax deferred savings plan will overcome higher tax rates over time.