Which of the following statements is true regarding profit-sharing distributions?

The statement regarding profit-sharing distributions that is true is that contributions can be withdrawn after they are vested. In a profit-sharing plan, employees typically receive contributions from their employer based on the company's profits. For these contributions, there is usually a vesting schedule that dictates how long an employee must work for the company before they gain full ownership of the employer's contributions. Once an employee is fully vested, they can withdraw those contributions when certain conditions are met, such as reaching retirement age, termination of employment, or other plan-defined circumstances.

The other statements do not align with the characteristics of profit-sharing distributions. While it is true that some distributions may occur at retirement, that is not the only permissible occasion for withdrawals; thus, the first statement is limiting. The third statement inaccurately implies that there is an annual restriction on withdrawals, whereas profit-sharing plans can be structured to allow for more flexible withdrawal options depending on the plan's terms. Lastly, the assertion that contributions must remain undistributed for ten years is not a standard requirement in profit-sharing plans; instead, distribution rules vary based on specific plan provisions and compliance with relevant tax regulations.

Hence, the ability to withdraw vested contributions after fulfilling the plan's vesting requirements is a fundamental aspect of profit-sharing