Chapter 9 - Question 8 :

Help me to explain this question. Thank you

Jordan contributed $5,000 each year to her Roth IRA for eleven years. At age 57, Jordans IRA was worth $100,000 consisting of $55,000 in contributions, $25,000 in conversions from her 401(k) plan last year, and earnings of $20,000. What are the tax consequences if Jordan takes a complete distribution of the Roth IRA at age 57, once she has retired, to travel around the world?

A. Only $20,000 is subject to the 10 percent early withdrawal penalty.

B. $20,000 is subject to income tax but no penalty.

C. $45,000 is subject to the 10 percent early withdrawal penalty and $20,000 is subject to income tax.

D. None of the distribution is taxable or subject to a penalty.