Match each tax classification to the correct type of investment income. taxable tax deferred tax exempt funds distributed from a 529 plan that are used for college capital gains in a brokerage account interest earned on a traditional 401(mathrm(k)) account

Question

Match each tax classification to the correct type of investment income. taxable tax deferred tax exempt funds distributed from a 529 plan that are used for college capital gains in a brokerage account interest earned on a traditional 401(mathrm(k)) account

Answer 1

### - Taxable: capital gains in a brokerage account- Tax exempt: funds distributed from a 529 plan that are used for college- Tax deferred: interest earned on a traditional 401(k) account

Answer 2

## Step 1: Identify the tax classification for capital gains in a brokerage account### Capital gains in a brokerage account typically fall under the 'taxable' category since taxes are due in the year gains are realized.## Step 2: Identify the tax classification for funds distributed from a 529 plan used for college### Withdrawals from a 529 plan used for qualified education expenses are typically tax-exempt.## Step 3: Identify the tax classification for interest earned on a traditional 401(k) account### Interest earned in a traditional 401(k) account is usually tax-deferred until withdrawal, where it is then taxed as income.

Question

Match each tax classification to the correct type of investment income. taxable tax deferred tax exempt funds distributed from a 529 plan that are used for college capital gains in a brokerage account interest earned on a traditional 401(mathrm(k)) account

Answer

Answer

Explanation