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Question

At the age of $57,$ James converted his traditional IRA, valued at $$45,000,$ to a Roth IRA. At age $60,$ James took a distribution from this Roth IRA of $$100,000$ to buy a new car for his daughter for college. Which of the following statements is true with regards to the distribution from the Roth IRA?

A$.$$$100,000$ will be subjected to ordinary income tax.

B$.$$$55,000$ will be subjected to ordinary income tax.

C$.$$$55,000$ will not be subjected to ordinary income tax or penalty.

D$.$$$55,000$ will be subjected to ordinary income tax and penalty.