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Scenario $6$: Qualified Reservist Distribution

John, age $50,$ is a military reservist called to active duty. He takes a $$40,000$ distribution from his Traditional IRA.

Wages: $$18,000$

Interest and Dividend income: $$900$

Itemized Deductions: $$13,000$

Allowable deduction for self$-$employment tax: None

Calculate:

The portion of the distribution subject to the $10\%$ early withdrawal penalty.

AGI, Taxable Income, and Total Tax Liability