What is the taxable portion of Emily's pension from Maple Enterprises using the simplified method?

To determine the taxable portion of Emily's pension using the simplified method, it is essential to understand how pension distributions are taxed. The simplified method is typically employed for pensions that are attributable to after-tax contributions plus any prior non-deductible contributions made by the taxpayer.

Under the simplified method, the taxable portion is computed using a specific formula that includes factors such as Emily's age, the total value of the pension, and her contributions. Since this question presents a multiple-choice format, the correct answer represents the accurate calculation of these factors.

In this case, answer B reflects the correct computation based on the simplified method, indicating that it factors in all necessary variables aligning with IRS guidelines for the proportional taxability of such pension distributions. It ensures that only the portion attributable to pre-tax contributions is taxed and not the contributions made after-tax, which would not be taxable.

By understanding how the simplified method allocates taxable versus non-taxable portions, it becomes clear why $18,789 is the correct taxable amount reported for Emily's pension.