Tim has worked for one employer his entire career.While he was working, he participated in the employers

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Tim has worked for one employer his entire career.While he was working, he participated in the employer’s defined contribution plan [traditional 401(k)].At the end of 2018, Tim retires. The balance in his defined contribution plan is$2,000,000 at the end of 2017.

a. What is Tim’s minimum required distribution for 2018 in 2019 if he is 68 years old at the end of 2018?

b. What is Tim’s minimum required distribution for 2018 if he turns 70½ during 2018 and he has not turned 71 years old by the end of the 2018?When must he receive this distribution?

c. What is Tim’s minimum required distribution for 2018 in 2019 if he is 73 years old at the end of 2018?

d. Assuming that Tim is 75 years old at the end of 2018 and his marginal tax rate is 32 percent, what amount of his distribution will he have remaining after taxes if he receives only a distribution of $50,000 for 2018?

e. {Forms}.Complete Form 5329, to report the minimum distribution penalty in part d.Use the most recent form available.

Distribution
The 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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Taxation Of Individuals And Business Entities 2019 Edition

ISBN: 9781259918391

10th Edition

Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver

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