BONUS QUESTION $(3$ pts$)-$ RECOMMENDATION: Read all answers before answering

Aaron is retired and has an annual social security income of $$20,000.$ He needs to pay a large medical bill and withdraws $$10,000$ from his UL policy. $$4,000$ is principle that is considered part of the cost basis. The remaining $$6,000$ is in excess of the cost basis, which of the following factors will be applicable. $($Check ALL the apply$)$

There will be no impact on Social Security Benefits because the excess of cost basis money withdrawn was post$-$tax money paid in$.($You DO NOT want to check this one $-$ it is a bad choice$)$

The withdrawal in excess will become a taxable event to the owner. $($Pay close attention here $-$ You REALLY want to check this one!$)$

The increased income, combined with his current income, puts him above the $$25,000$ limit$.$ Therefore $50\%$ of his Social Security Benefits will become taxable. $($Yep $-$ a REALLY, Really good choice to check$)$

The principle withdrawn will be taxable because it was paid on a pre$-$tax basis. $($Really bad choice$)$thanks for a great semester! Hope you enjoyed this bonus question and the easy answers.