To claim an exception to the penalty on an early distribution from a retirement

Question

To claim an exception to the penalty on an early distribution from a retirement plan. O To calculate the taxable portion of a traditional IRA distribution. O To determine the taxable amount of a nonqualified distribution from a Roth IRA. O To determine the taxable amount of a traditional IRA converted to a Roth IRA. Mark for follow up Question 12 of 75. 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? O $0 taxable; $0 penalized. O $0 taxable: $2,000 penalized. $0 taxable, $20,000 penalized. O $2,000 taxable; $2,000 penalized. Mark for follow up uestien 13 of 75. 10 000 in social security benefits in 2016. He also earned $12,00 Ihnt percentage of Kevin's benefits will most lik 120 020 in social security benefits in 2016.

Explanation / Answer

option A. 0 taxed, 0 penalized

the 20000 distribution first applied towards 18000 regular contribution. this is never tax deducted hence no taxes on withdrawal applied.

balance 2000 from taxable conversion is also not taxable as 5 years is over from the time of conversion

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