Question
Luna (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions) and her IRA is now worth $50,000. Luna
Luna (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions) and her IRA is now worth $50,000. Luna plans to take the $50,000 out of the traditional IRA, pay the taxes due from the traditional IRA distribution, and contribute (roll over) the remaining distribution to a Roth IRA. Lunas marginal tax rate is 24 percent.
- What amount of income tax, if any, does Luna owe as a consequence of the rollover as described?
- What amount of penalty tax, if any, does Luna owe as a consequence of the rollover as described?
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Microeconomics Theory And Applications
Authors: Edgar K. Browning, Mark A. Zupan
13th Edition
1119368928, 9781119368922
