select the correct answer. which sentence best describes an incentive for saving for education with a 529…

select the correct answer. which sentence best describes an incentive for saving for education with a 529 plan? a. the income generated by a 529 plan is tax - exempt. b. colleges offer a reduced price for tuition paid for with funds from a 529 plan. c. there is no penalty if withdrawals are made for non - education - related expenses. d. the income generated by a 529 plan is tax deferred.

select the correct answer. which sentence best describes an incentive for saving for education with a 529 plan? a. the income generated by a 529 plan is tax - exempt. b. colleges offer a reduced price for tuition paid for with funds from a 529 plan. c. there is no penalty if withdrawals are made for non - education - related expenses. d. the income generated by a 529 plan is tax deferred.

Answer

Brief Explanations:

A 529 plan is a tax - advantaged savings plan for education. The income generated by it is tax - exempt when used for qualified educational expenses. Option B is incorrect as colleges don't offer reduced tuition just because of 529 plan usage. Option C is wrong since non - education related withdrawals have penalties. Option D is incorrect as it's tax - exempt not tax - deferred.

Answer:

A. The income generated by a 529 plan is tax exempt.