Mark for follow up Question 12 of 75 Jamie is 42 years old and received a $20,00

Question

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 reqular 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. 0 $0 taxable; $2,000 penalized. $0 taxable, $20,000 penalized. O $2,000 taxable: $2,000 penalized. Mark for follow up Question 13 of 75. roceived $20,000 in social security benefits in 2016. He also earned $12,000 in what nercentage of Kevin's benefits will most likely

Explanation / Answer

Answer(1)- Option "B" is correct that says, "0 taxable; 2000 penalized.

Explanation- Amount is not taxable if distribution pertains to Roth IRAs. Investors who are younger than 59.5, have to pay 10% early distribution penalty. 10% of 20000 = $2000.

Answer(2)- Option "A" is the false statement that says, "Double category method".

Explanation- When this method is used, investors keep track their average basis of short term and long term shares separately.

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