Which of the following statements regarding qualified tuition programs is incorrect?
A) Distributions from income earned by a qualified tuition program are tax-free if used for qualified higher education expenses.
B) Distributions of income are taxed to the donor if the proceeds are not used for higher education expenses.
C) A qualified tuition program may be established by parents or grandparents.
D) Contributions to a qualified tuition program are distributed tax-free.
Answer: B
Tax
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- Income in respect of a cash-basis decedent
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