Huxley (60) and Elise (45) started the process on adopting Elwood (15) on May 1, 2020. On July 6, 2020, Huxley took a $5,000 distribution from his 401(k). On September 24, 2020, Elise took a $5,000 distribution from her IRA. What is the tax treatment of each distribution?

Huxley's distribution is taxable and not subject to the early distribution penalty. Elise's distribution is taxable and subject to the early distribution penalty.

Huxley's distribution is not taxable or subject to the early distribution penalty. Elise's distribution is taxable and subject to the early distribution penalty.

Huxley's distribution is taxable and not subject to the early distribution penalty. Elise's distribution is taxable and not subject to the early distribution penalty.

Huxley's distribution is taxable and subject to the early distribution penalty. Elise's distribution is taxable and not subject to the early distribution penalty.