Find how should harry determine the taxable amount

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Problem 1: Harry (65) retired this year and began taking distributions from his 401(k). Contributions to his 401(k) were made over the course of his career through a combination of before-tax contributions, after-tax contributions, and employer matching. How should Harry determine the taxable amount of his distribution?

(A) All of Harry's distributions will be taxable because a 401(k) is a qualified plan.
(B) Harry should use the Simplified Method to determine how much of his distribution is attributable to return of cost basis.
(C) Harry should use the General Rule to determine how much of his distribution is attributable to cost basis.
(D) Distributions from a 401(k) plan are always tax-free.

Reference no: EM132700218

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