Which of the following best describes distributions from a traditional defined contribution plan?
A)Distributions from defined contribution plans are fully taxable to the recipient as ordinary income.
B)Distributions from defined contribution plans are partially taxable to the recipient as ordinary income and partially nontaxable as a return of capital.
C)Distributions from defined contribution plans are fully taxable to the recipient as long-term capital gains.
D)Distributions from defined contribution plans are partially taxable to the recipient as capital gains and partially nontaxable as a return of capital.

Question

Quizplus · Accepted Answer

Distributions from traditional defined contribution plans, such as 401(k) and 403(b) plans, are fully taxable to the recipient as ordinary income. This means that the distributions are taxed at the recipient's marginal tax rate, just like regular income.

Which of the Following Best Describes Distributions from a Traditional