Question

Jamie is 42 years old and received a $20,000 distribution from his Roth IRA, established in...

Jamie is 42 years old and received a $20,000 distribution from his Roth IRA, established in 2009. At the time of the distribution the Roth IRA account totaled $33,748: $18,000 regular contributions, $10,000 taxable conversion contributions made in 2014, and $5,748 earnings. How much of his distribution is taxable and subject to the early distribution penalty:

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

$18,000 Regular contributions are contributed after tax. Hence they are tax free money therefore no taxes as well as no penalty is levied on their withdrawal.

$5,748 are the earnings earned by Roth IRA. Now these earnings are liable for the Taxes however there is no penalty for their withdrawal.

$10,000 taxable conversion contributions made in 2014 had not completed their 5 years term before their withdrawal, Hence 10% Penalty shall be levied provided certain conditions such as Age, Death or Disability etc

ANSWER

Penalty of 10% of withdrawal ie $20,000 * 10% ie $2,000 shall be levied.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Jamie is 42 years old and received a $20,000 distribution from his Roth IRA, established in...
Jamie is 42 years old and received a $20,000 distribution from his Roth IRA, established in 2010. At the time of the distribution, the Roth IRA account totaled $33,748: $18,000 regular commissions, $10,000 taxable conversion contributions made in 2015, and $5,748 earnings. How much of the distribution is taxable and subject to the early distribution penalty? a) $0 taxable; $0 penalized b) $0 taxable; $2,000 penalized c) $0 taxable; $20,000 penalized d) $2,000 taxable; $2,000 penalized
Leo is 34 years old. He contributed $3,000 to a Roth IRA in 2014 and $2,000...
Leo is 34 years old. He contributed $3,000 to a Roth IRA in 2014 and $2,000 in 2015. In 2017, he withdrew the entire balance, which had grwon to $5,466. How much of Leo's withdrawal is taxable and subject to penalty?
Ryan is 39 years old and works as a real estate agent. Ryan’s marginal tax rate...
Ryan is 39 years old and works as a real estate agent. Ryan’s marginal tax rate is 24%. Ryan has a traditional (deductible) IRA with a current balance of $80,000. The IRA consists of $60,000 of contributions that Ryan made and deducted on his tax return and $20,000 of account earnings. In the current year, Ryan receives a distribution of the entire $80,000. He contributes $60,000 to a Roth IRA and keeps the remaining $20,000. What is Ryan’s total income...
Ty (single) would like to make a contribution to a Roth. He is 25 years old....
Ty (single) would like to make a contribution to a Roth. He is 25 years old. His AGI is $200,000. He is an active participant in a retirement plan at work. This will be his first time to make a contribution to a Roth or Traditional IRA.   What can you advise him? a. You are over the phase-out ranges for contributions to either a Roth or a Traditional IRA.  Congratulations on the high income!   b. Yes, you are eligible to make...
George (age 42 at year-end) has been contributing to a traditional IRA for years (all deductible...
George (age 42 at year-end) has been contributing to a traditional IRA for years (all deductible contributions) and his IRA is now worth $31,800. He is planning on transferring (or rolling over) the entire balance into a Roth IRA account. George’s marginal tax rate is 24 percent. (Leave no answer blank. Enter zero if applicable. Round your intermediate calculations and final answers to the nearest whole dollar amount.) a. What are the tax consequences to George if he takes $31,800...
Which of the following is true about future qualified distributions from a Roth IRA by a...
Which of the following is true about future qualified distributions from a Roth IRA by a person who will be 65 years old at the time the distributions begin? Assume the individual opened the account before age 60. The entire amount of the distribution will be taxable The entire amount of the distributions will be tax-free. Only the accumulated earnings will be tax-free. Only the previous contributions will be tax-free.
In 2019, Rashaun (62 years old) retired and planned on immediately receiving distributions (making withdrawals) from...
In 2019, Rashaun (62 years old) retired and planned on immediately receiving distributions (making withdrawals) from his traditional IRA account. The balance of his IRA account is $160,000 (before reducing it for withdrawals/distributions described below). Over the years, Rashaun has contributed $40,000 to the IRA. Of his $40,000 contributions, $30,000 was nondeductible and $10,000 was deductible. Assume Rashaun did not make any contributions to the account during 2019. (Do not round intermediate calculations. Round your final answers to the nearest...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age...
Question 1 (1 point) Ray died this year at age 73, and his wife, Mary, age 55, is the designated beneficiary on his Roth IRA. Ray's Roth IRA was established 3 years ago. Which of the following statements is(are) CORRECT? I Ray was not subject to required minimum distributions from his Roth IRA during his lifetime. II If Mary chooses to distribute the entire balance of the Roth IRA this year, the distribution may be subject to both regular income...
2 . Identify which of the following statements is true: If an S Corporation has no...
2 . Identify which of the following statements is true: If an S Corporation has no accumulated earnings and profits, the amount distributed to a shareholder will not increase the shareholder's basis in the stock        If a C Corporation does not distribute its income to its shareholders, double taxation of the income will occur.        C Corporation operating losses are deductible by the individual shareholders        S Corporation operating losses are never deductible by the individual...
14. Jim, single, took out a mortgage on his home for $590,000 five years ago. In...
14. Jim, single, took out a mortgage on his home for $590,000 five years ago. In September of this year, when the home had a fair market value of $620,000 and he owed $550,000 on the mortgage, he took out a home equity loan for $80,000. Will used the funds to purchase a yacht to be used for recreational purposes. What is the maximum amount of debt on which he can deduct home equity interest? a. $70,000. b. $80,000. c....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT