What are the tax consequences if Maksim makes a partial rollover of his 401(k) plan assets?

A) He must only pay income tax on the amount retained.
B) He must only pay a 10% penalty on the amount retained.
C) He must pay a 10% penalty plus income tax on the amount retained.
D) Because partial rollovers are permitted, he does not have to pay income tax or the 10% penalty on the amount retained.

Answer: C) He must pay a 10% penalty plus income tax on the amount retained.

Business

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