Taxpayers who make aftertax contributions to a qualified emp

Taxpayers who make after-tax contributions to a qualified employer plan recover their investment (cost) when they begin to take periodic payments. How is the after-tax contribution recovered?

A) The contribution is recovered last.

B) A portion is recovered each year, for the first ten years.

C) The contribution is recovered upfront.

D) A portion is recovered each year, until fully recovered.

*Please answer only you are 100% sure.

Solution

The Answer is \"D\"

D.  A portion is recovered each year, until fully recovered.

The After tax contribution is recovered on a proprate basis. Therefore, A portion is recovered each year, until fully

recovered.