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Jim, who is age 39, converts a $74,500 traditional IRA to a Roth IRA in 2015. He also contributes...

Jim, who is age 39, converts a $74,500 traditional IRA to a Roth IRA in 2015. He also contributes $5,500 to a Roth IRA in 2015 for the tax year 2015. If Jim takes a $90,000 distribution from his Roth IRA in 2016 when the account is worth $100,000, how much of distribution is subject to income tax and how much of distribution is subject to 10% penalty?

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ANSWER Given Th at odona iRA toa Reh iRA in 3015 a RaTh IRA 05 or The taz MaY 20l5 * i jim takes a 4o,o dis tri bufian ance -ง่า4,500 8,526, 85 Nst income - 3, 524.85

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