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Mrs. Kirk withdrew $45,000 from a retirement account and used the money to furnish her new home. Her marginal tax rate is 24 percent.
Mrs. Kirk withdrew $45,000 from a retirement account and used the money to furnish her new home. Her marginal tax rate is 24 percent. Required: Compute the tax cost of the withdrawal in each of the following cases: a. Mrs. Kirk is 56 years old. She withdrew the money from a personal savings account. b. Mrs. Kirk is 56 years old. She withdrew the money from her employer-sponsored qualified plan upon her retirement from the company. Mrs. Kirk made no after-tax contributions to this plan. c. Mrs. Kirk is 56 years old. She withdrew the money from her employer-sponsored qualified plan, but she intends to work for the employer for at least 10 more years. Mrs. Kirk made no after-tax contributions to this plan. d. Mrs. Kirk is 61 years old. She withdrew the money from her employer-sponsored qualified plan, but she intends to work for the employer for at least 4 more years. Mrs. Kirk made no after-tax contributions to this plan. a. Tax cost of the withdrawal b. Tax cost of the withdrawal c. Tax cost of the withdrawal d. Tax cost of the withdrawal Amount
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