SIE practice questioneasy529 Plans
A primary benefit of investing in a 529 plan is:
- AGuaranteed rate of return
- BDeductibility of contributions from federal income tax
- CTax-free growth if used for qualified education expenses✓ Correct answer
- DNo investment limitations
Explanation
Why C — Tax-free growth if used for qualified education expenses
A is correct; earnings in a 529 plan grow tax-free if used for qualified education costs. B is incorrect—contributions are not federally deductible. C and D do not reflect the features of 529 plans.
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