Question
a) A taxpayer who takes a distribution from a traditional IRA in which they previously made nondeductible contributions must: Report the entire amount as a
a)
A taxpayer who takes a distribution from a traditional IRA in which they previously made nondeductible contributions must:
Report the entire amount as a taxable distribution on Form 1040.
Use Form 8606, Nondeductible IRAs, to compute the taxable portion of their distribution.
Use the general rule to compute the taxable portion of their distribution.
Use the simplified method to compute the taxable portion of their distribution.
b)
Taxpayers may be subject to a 10% additional tax if they take a distribution from a retirement savings plan unless they are at least age:
55
59
63
65
c)
Which of the following is a type of nontaxable income that does NOT need to be reported on a federal tax return?
Interest income from municipal bonds.
Interest income from a U.S. Treasury bond.
Unemployment compensation.
Welfare benefits.
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