Distribution of assets from qualified plan

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Reference no: EM131999031

1. Donald, age 38, has a qualified plan balance of $500,000. He made a little mistake in not filing Federal Income tax returns for the last 4 years. Donald is now willing to pay the tax levy of $85,000 from his qualified plan balance. The payment of the tax levy from the qualified plan balance is ordinary income and is subject to a 10% early withdrawal penalty. T/F? True False

2. Tina is age 45. Through her investment skill and some luck, she has accumulated $800,000 in her 401k plan. She decides to retire and take equal periodic payments from her 401k plan for the rest of her life. She is liable for a 10% penalty on each distribution because she is not yet 59 and 1/2. T/F? True False

3. A distribution of assets from a qualified plan and a loan from a qualified plan are treated the same for tax purposes. T/F? True False

Reference no: EM131999031

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