Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7. Thomas is 49 years old and has a Roth account balance in his employers 401(k) plan. On August 11th he took a distribution of

7. Thomas is 49 years old and has a Roth account balance in his employers 401(k) plan. On August 11th he took a distribution of $100,000 from the account to buy himself a sports car. At that time, his adjusted basis in the plan was $600,000 and the Fair Market Value was $1,000,000. What is the taxable amount of the distribution, and the amount of the tax penalty?

a. $0 taxable, $0 penalty b. $40,000 taxable, $4,000 penalty c. $40,000 taxable, $0 penalty d. $100,000 taxable, $10,000 penalty

ANSWER #7 _______

8. Which of the following are benefits of converting traditional 401(k) balances to a Roth account within a qualified plan through an in-plan Roth rollover?

i. The conversion may result in a reduction in income tax in future years. ii. The conversion will result in increasing after-tax deferred assets and reducing the

gross estate. iii. The conversion will eliminate the need for minimum distributions during the life of

the participant.

  1. iandii

  2. ii and iii

  3. i and iii

  4. i, ii and iii

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Crossover Of Audit And Evaluation Practices Comparative Policy Evaluation

Authors: Maria Barrados, Jeremy Lonsdale

1st Edition

1032173874, 978-1032173870

More Books

Students also viewed these Accounting questions

Question

What is concurrent engineering?

Answered: 1 week ago

Question

Question 1 (a2) What is the reaction force Dx in [N]?

Answered: 1 week ago

Question

Does it have at least one-inch margins?

Answered: 1 week ago

Question

Does it highlight your accomplishments rather than your duties?

Answered: 1 week ago