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Mary Lou took a $7,000 distribution from her educational savings account and used $6,500 to pay for qualified higher education expenses. On the date of the distribution, her educational savings account had a $28,000 balance including the $21,000 she had contributed. How much of the $7,000 distribution is tax free?

a. $1,750

b. $7,000

c. $6,875

d. $-0-

e. $6,500

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M946549

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