in 2011, Pamelia invested 5,000 in a Roth. In 2017, at age 60 Pamela withdrew the...
in 2011, Pamelia invested 5,000 in a Roth. In 2017, at age 60 Pamela withdrew the entire balance, which then totaled 7,000 with the earnings that had accumulated over the years. What is the tax treatment
Homework Answers
Answer:
As original contribution to Roth IRA is not tax deductible (it is paid out of money for which tax is already paid), contributions can be withdrawn without tax or penalty
Withdrawal from Roth IRA are tax free if meets qualified distribution and five-tax-year period rule.
As amount of $5,000 was invested in 2011 and withdrawal is in 2017 at age 60, it meets:
- Five year tax period and
- Qualified distribution rule since the withdrawal is made on or after age 59 1/2
Hence withdrawals of both contribution as well as Earnings are tax free.
Tax liability = $0
Add Answer to:
in 2011, Pamelia invested 5,000 in a Roth. In 2017, at
age 60 Pamela withdrew the...
In 2011, Pamelia invested $5,000 in a Roth IRA. In 2017, at age 60, Pamelia withdrew...
In 2011, Pamelia invested $5,000 in a Roth IRA. In 2017, at age 60, Pamelia withdrew the entire balance, which then totaled $7,000 with the earnings that had accumulated over the years. What is the tax treatment of this distribution? The $7,000 is not included in income, but Pamelia must pay a 10% penalty on the entire distribution. O The $2,000 in earnings is included in income, and Pamelia is required to pay a 10% penalty on the entire distribution....
Question 2 of 75 Fred turned 70% on October 1, 2016, He took the first required...
Question 2 of 75 Fred turned 70% on October 1, 2016, He took the first required minimum distribution from his t O December 31, 2017. O March 1, 2018 O April 1, 2018. O April 18, 2018. Mark for folow up Question 3 of 75 Form 8606 is used for all of the following purposes EXCEPT: O To claim an exception to the penalty on an early distribution from a retirement plan. To calculate the taxable portion of a traditional...
Lisa, age 45. needed some cash so she withdrew $54,500 from her Roth IRA. At the...
Lisa, age 45. needed some cash so she withdrew $54,500 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,900 to her account. What amount of the distribution is taxable and subject to early distribution penalty? Multiple Choice O $0. $5,450. $33,600. $54,500
Linda, age 55, needed some cash so she withdrew $60,000 from her Roth IRA. At the...
Linda, age 55, needed some cash so she withdrew $60,000 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $150,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty? Select one: a. $40,000 is taxable and $40,000 is subject to the penalty b. $0 is taxable and $40,000 is subject...
1) Keisha (50 years of age) is considering whether to participate in her company's Roth 401(k)...
1) Keisha (50 years of age) is considering whether to participate in her company's Roth 401(k) or traditional 401(k). This year, she plans to invest either $4,000 in a Roth 401(k) or $5,000 in a traditional 401(k). Keisha plans on leaving the contribution in the retirement account for 20 years when she will receive a distribution of the entire balance in the account. Her employer does not have a matching program for employee contributions to retirement accounts. Assume Keisha can...
9. Which of the following statements concerning Roth IRAs is correct? a. in the event of...
9. Which of the following statements concerning Roth IRAs is correct? a. in the event of distributions from a Roth IRA, the earnings are deemed withdraw first. b. A distribution from a Roth IRA must include both earnings and contributions c. if the entire Roth IRA is distributed within 5r years to buy a car, only the earnings are subject to income tax, but the entire amount may be subject to penalty. d. if distributions are made within 5 years...
Tatia, age 38, single taxpayer, has made deductible contributions to her traditional IRA over the past...
Tatia, age 38, single taxpayer, has made deductible contributions to her traditional IRA over the past few years. When her account balance was $32,000, she transferred the entire $32,000 out of her traditional IRA and immediately into a Roth IRA. Her current marginal tax rate is 25 percent. What amount of tax and penalty is she required to pay on this rollover?
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 $28,600. 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 $28,600...
Keisha (50 years of age) is considering whether to participate in her company's Roth 401(k) or tr...
Keisha (50 years of age) is considering whether to participate in her company's Roth 401(k) or traditional 401(k). This year, she plans to invest either $4,000 in a Roth 401(k) or $5,000 in a traditional 401(k). Keisha plans on leaving the contribution in the retirement account for 20 years when she will receive a distribution of the entire balance in the account. Her employer does not have a matching program for employee contributions to retirement accounts. Assume Keisha can earn...
Applicable Tax Year: 2019 John Q. Public (age 49) and his wife Karen (age 46) file...
Applicable Tax Year: 2019 John Q. Public (age 49) and his wife Karen (age 46) file a joint return. They have three children: Elizabeth (age 24) who is a full time law student at State Law School, Charles (age 21), who is a full time student at State College, and William (age 19). Charles earned $5,000 and Elizabeth earned $7,000 from summer jobs. John and Karen provide over half the suppor for all three children. Karen's mom (age 75), who is blind, resides in...
In 2011, Pamelia invested $5,000 in a Roth IRA. In 2017, at age 60, Pamelia withdrew the entire balance, which then totaled $7,000 with the earnings that had accumulated over the years. What is the tax treatment of this distribution? The $7,000 is not included in income, but Pamelia must pay a 10% penalty on the entire distribution. O The $2,000 in earnings is included in income, and Pamelia is required to pay a 10% penalty on the entire distribution....
Question 2 of 75 Fred turned 70% on October 1, 2016, He took the first required minimum distribution from his t O December 31, 2017. O March 1, 2018 O April 1, 2018. O April 18, 2018. Mark for folow up Question 3 of 75 Form 8606 is used for all of the following purposes EXCEPT: O To claim an exception to the penalty on an early distribution from a retirement plan. To calculate the taxable portion of a traditional...
Lisa, age 45. needed some cash so she withdrew $54,500 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,900 to her account. What amount of the distribution is taxable and subject to early distribution penalty? Multiple Choice O $0. $5,450. $33,600. $54,500
Most questions answered within 3 hours.
-
A failure of an engine control unit causes it to fail an average
of 0.1 times...
asked 7 minutes ago -
A siren on an emergency car moving with velocity 90 km/hour
produces the sound with frequency...
asked 8 minutes ago -
Consider the schema below that models a bank’s branches,
customers and their accounts and loans. Provide...
asked 15 minutes ago -
What kinds of policies should be considered when individuals
decisions may likely impact public expense? For...
asked 23 minutes ago -
The financial statements of Apple Inc. show the following
numbers for fiscal year 2017 ($000,000):
Revenue...
asked 29 minutes ago -
Suppose that you are given the following results. Find the
correlation coefficient of the data.
sx...
asked 38 minutes ago -
The width of a tool used for semiconductor manufacturing
is assumed to be normally distributed with...
asked 40 minutes ago -
A
runaway train car that has a mass of 1,400 kg travels at a speed of...
asked 44 minutes ago -
The expected abnormal earnings of a firm that has earnings of
$40,000 with a required equity...
asked 42 minutes ago -
A spherical surface completely surrounds a collection of
charges. Find the electric flux through the surface...
asked 58 minutes ago -
Two capacitors with capacitances of 12 and 18.1 µF,
respectively, are connected in parallel. The system...
asked 44 minutes ago -
Let's say you are a small business owner that provides
business-to-business software-as-a-service to non-profit
organizations. Your...
asked 49 minutes ago