b. Explain how distributions from a qualified pension plan, which are made in the form of annuity payments, are reported by an employee when the pension plan provides for matching employee contributions. O A. The taxability of payments received depends on whether the employee contributions were made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax basis, all amounts received are fully taxable. If the employee contributions were made on an after-tax basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's contributions are considered the employee's investment in the contract. OB. The taxability of payments received depends on whether the employee contributions were made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's contributions are considered the employee's investment in the contract. If the employee contributions were made on an after-tax basis, all amounts received are fully taxable. O C. The distributions are fully taxable when the payment is received.
b. Explain how distributions from a qualified pension plan, which are made in the form of annuity payments, are reported by an employee when the pension plan provides for matching employee contributions. O A. The taxability of payments received depends on whether the employee contributions were made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax basis, all amounts received are fully taxable. If the employee contributions were made on an after-tax basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's contributions are considered the employee's investment in the contract. OB. The taxability of payments received depends on whether the employee contributions were made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's contributions are considered the employee's investment in the contract. If the employee contributions were made on an after-tax basis, all amounts received are fully taxable. O C. The distributions are fully taxable when the payment is received.
Chapter19: Deferred Compensation
Section: Chapter Questions
Problem 2DQ
Related questions
Question
Transcribed Image Text:Explain how distributions from a qualified pension plan, which are made in the form of annuity
payments, are reported by an employee under the following circumstances:
a. No employee contributions are made to the plan.
b. The pension plan provides for matching employee contributions.
a. Explain how distributions from a qualified pension plan, which are made in the form of annuity
payments, are reported by an employee when no employee contributions are made to the plan.
O A. The distributions are only taxable to the employee once the taxpayer is retired.
B. The distributions are only taxable to the employee once the taxpayer reached 65 of age.
C. The distributions are fully taxable to the employee when the payment is received.
D. The distributions are not taxable to the employee when the payment is received.
b. Explain how distributions from a qualified pension plan, which are made in the form of annuity
payments, are reported by an employee when the pension plan provides for matching employee
contributions.
O A. The taxability of payments received depends on whether the employee contributions were
made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax
basis, all amounts received are fully taxable. If the employee contributions were made on an
after-tax basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's
contributions are considered the employee's investment in the contract.
O B. The taxability of payments received depends on whether the employee contributions were
made on a pre-tax or after-tax basis. If the employee contributions were made on a pre-tax
basis, amounts received are taxed under the Sec. 72 annuity rules. The employee's
contributions are considered the employee's investment in the contract. If the employee
contributions were made on an after-tax basis, all amounts received are fully taxable.
O C. The distributions are fully taxable when the payment is received.
O D. The distributions are not taxable when the payment is received.
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