Final answer:
Joege can consider $4,308 of his $14,000 non-periodic distribution from his 401k plan to be tax-free. This calculation is based on the proportion of his after-tax contributions to the total account balance. Option b is the correct amnswer.
Step-by-step explanation:
The subject of this question is Business, specifically dealing with a non-periodic distribution from a Section 401k plan and the tax implications associated with it. The relevant calculation involves determining the proportion of an individual's contribution that is not tax-deferred and how that affects the tax treatment of the distribution.
To determine how much of Joege's $14,000 distribution is tax-free, we can use the formula:
Tax-free portion = Distribution * (After-tax contributions / Total account balance)
In this case, that would be:
Tax-free portion = $14,000 * ($24,000 / $78,000) = $14,000 * 0.3077 = $4,307.69 (rounded to $4,308)
So the answer is that $4,308 of the distribution is tax-free. This corresponds to option b. The mentioned correct option in the final answer is option b.