Exam $-$ Basic Elements of Income Taxation

SELECT MULTIPLE

Relevant Course:Basic Elements

Which of the following is true about the tax treatment of Modified Endowment Contracts $($MECs$)?$ Check all that apply.

Distributions, including loans, from MECs are taxable to the extent of the policy's gain.

MECs are treated differently for income tax purposes than non$-$MECs.

MECs are usually income tax$-$free, including all distributions and loans.

Distributions, including loans, from MECs are subject to a $10\%$ penalty if the owner is under age $\frac{591}{2}.$

Question #$17$

Search