A taxpayer pulled out $85,000 from their retirement plan to cover living expenses in TY2020 due to lossof income related to the COVID-19 pandemic. Assuming that they did not opt to tax all income in TY2020;What is the amount of the retirement income they will report in TY2021?Select one:a. $42,500 b. $28,333 c. $21,250 d. $0

A coronavirus-related distribution is a distribution that is made from an eligible retirement plan…

Answered: taxpayer pulled out $85,0

Business

Accounting

taxpayer pulled out $85,0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

A taxpayer pulled out $85,000 from their retirement plan to cover living expenses in TY2020 due to loss
of income related to the COVID-19 pandemic. Assuming that they did not opt to tax all income in TY2020;
What is the amount of the retirement income they will report in TY2021?
Select one:
a. $42,500 b. $28,333 c. $21,250 d. $0

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