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Question 5 of 66. Gus (35) takes an early distribution of $15,000 from his traditional IRA and uses the funds to help him pur
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Answer #1

Answer is option B

B. $5000

In case of traditional IRA 10% of additional early withdraw penalty is applied if a taxpayer is below 59 ½ years. However, if the withdrawal amount is used for used toward the purchase of a first home, the rule of 10% additional early withdrawal penalty does not apply up to the withdrawal of $10000. Therefore, $5000 (15000-10000) is only subject to the early distribution penalty.

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