George receives a $1,500 distribution from his educational savings account. He uses $1,200 to pay for qualified

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George receives a $1,500 distribution from his educational savings account. He uses $1,200 to pay for qualified higher education expenses. Immediately prior to the distribution, George’s account balance is $5,000, $3,000 of which is his contributions. What is George’s tax-free return of capital from the distribution? 

a. $1,500 

b. $1,200 

c. $900 

d. $750 

e. $600

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Income Tax Fundamentals 2019

ISBN: 9781337703062

37th Edition

Authors: Gerald E. Whittenburg, Steven Gill

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