Mindy, who is 44 years old, has five IRAs. On January 12th, she converts $40,000 in IRA 2, which is a traditional IRA, into a Roth IRA. On March 25th, she takes a distribution of $20,000 from IRA 1. On May 20th, she rolls over the $20,000 into IRA 4. Which of the following statements is correct?

a. Mindy owes tax and penalty on $40,000

b. Mindy owes tax and penalty on the $20,000 because it represents her second rollover during the year.

c. The $20,000 rollover qualifies for the 60-day rollover exception.

d. Mindy owes ordinary income tax on $60,000, but no penalty.