Which of the following statements is true regarding taxpayers receiving distributions from traditional defined contribution plans?
A)A taxpayer who retires at age 73 in 2020 must pay a required minimum distribution penalty if she does not receive a distribution in 2020.
B)The required minimum distribution penalty is 25 percent of the amount required to have been distributed.
C)A taxpayer who receives a distribution from a retirement account before she is 55 years old is subject to a 10 percent penalty on both the distributed and undistributed portions of her retirement account unless the distribution is a coronavirus-related distribution of $100,000 or less.
D)Taxpayers are not allowed to deduct either early distribution penalties or required minimum distribution penalties.

Question

Quizplus · Accepted Answer

The correct statement is that taxpayers cannot deduct penalties related to early distributions or required minimum distributions from their taxes. The other options contain inaccuracies regarding the age requirements, penalty percentages, and conditions under which penalties apply.

Which of the Following Statements Is True Regarding Taxpayers Receiving