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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 to the penalty

c. $0 is taxable and $0 is subject to the penalty  

d. $60,000 is taxable and there is no penalty  

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