Barry, age $13,$ recently received a terinal Illness diagnosis in which his doctor certified that Barry is expected to live $60$ months or less. As a resuli, Barry decided to quit his job and spend his time over the rext few years fulfilling his bucket list white he Is still healthy enough to do so$.$ To fund this, Barry would Eke to take a

substantial distribution for his $401($k$)$ plan at his former erployer. Which of the

following is true regarding the distribution assuming all contributions to the plan were pretax?

$$The distribution will be subject to tax and a $10\%$ penalty since Barry Is under age $59\%$ and does not meet a penalty exception.

$$The distribution will be subject to tax and a $10\%$ penaly on any amount In excess of $$10\mathrm{.}000.$

$$The distribution will not be subject to tax or a $10\%$ early estribution penalty due to special rules for terminal illness.

$$The distribution will be subject to tax but will not be subject to a $10\%$ early alstribution penalty.