Cassandra, age 33, made $20,000 non-deductible contributions to her non-deductible IRA over the years. When the balance in her IRA was $40,000, Cassandra received a distribution of $40,000 from her IRA in order to purchase a new car. How much of tax and 10% penalty will she pay on the distribution? Assume her marginal tax rate is 24%.

Select one:

a. $4,800

b. $2,000

c. $4,000

d. $6,800

e. $4,800