Mrs. Lohan, age 64, plans to retire this December. She estimates that the balance in her IRA

Question:

Mrs. Lohan, age 64, plans to retire this December. She estimates that the balance in her IRA will be $86,500, which she plans to withdraw to finance the purchase of a condominium. Assuming that her marginal tax rate is 24 percent, compute her after-tax cash from the IRA liquidation assuming that:

a. The IRA is a Roth IRA that she opened in 1999.

b. The IRA is a traditional IRA to which she made only deductible contributions.

c. The IRA is a traditional IRA to which she made $20,400 deductible and $32,600 nondeductible contributions.

Assume the taxable year is 2018.

Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....

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