Sam's grandmother contributes $13,000 a year for 8 years to Sam's Section 529 plan in the state of North Carolina. Sam is now 18 years old and has been accepted to the University of North Carolina. He withdraws $50,000 from the Section 529 plan to pay for tuition, books, fees, and room and board. In addition, he uses $20,000 of the distribution to buy a car. What are the tax consequences to Sam and his grandmother? a. Sam is taxed on the full $20,000 not used for educational expenses, and his grandmother has no tax consequences. b. His grandmother has no tax consequences. Sam is taxed on the earnings portion of the $20,000 not used for educational expenses. The earnings portion is also subject to a 10% penalty for using the distribution for a nonqualifying purpose. c. Sam pays no tax on the distribution, and his grandmother has no tax consequences. d. Sam pays no tax on the distribution, and his grandmother may claim a $30,000 deduction