Ryan is 39 years old and works as a real estate agent. Ryans marginal tax rate is 24%. Ryan has a traditional (deductible) IRA with
Ryan is 39 years old and works as a real estate agent. Ryan’s marginal tax rate is 24%. Ryan has a traditional (deductible) IRA with a current balance of $80,000. The IRA consists of $60,000 of contributions that Ryan made and deducted on his tax return and $20,000 of account earnings. In the current year, Ryan receives a distribution of the entire $80,000. He contributes $60,000 to a Roth IRA and keeps the remaining $20,000. What is Ryan’s total income tax and penalty on the transactions?
$0 income tax, $0 penalty
$20,000 income tax, $8,000 penalty
$5,000 income tax, $2,000 penalty
$20,000 income tax, $2,000 penalty
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The answer would be 20000 income tax and 2000 penalty Rol... View full answer
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South-Western Federal Taxation 2019 Individual Income Taxes
Authors: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
42nd Edition
978-1337702546
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