Telly, age 38, has a $140,000 IRA with Blue Mutual Fund. He has read good things about
Question:
Telly, age 38, has a $140,000 IRA with Blue Mutual Fund. He has read good things about the management of Green Mutual Fund, so he opens a Green Fund IRA. Telly asked for and received his balance from the Blue Fund on May 1, 2018. Telly opted to have no withholding on the distribution.
a. What amount will Telly receive from the Blue Fund IRA?
b. What amount must Telly contribute to the Green Fund IRA to avoid having taxable income and penalties for early withdrawal?
c. When is the last day Telly can roll over the amount received into the Green Fund IRA and avoid taxation in the current year, assuming no unusual circumstances?
d. What amount would Telly receive if the distribution were from his employer’s qualified retirement plan?
DistributionThe word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Income Tax Fundamentals 2019
ISBN: 9781337703062
37th Edition
Authors: Gerald E. Whittenburg, Steven Gill