Ngoda withdrew $$40,000$ from her Traditional IRA at age $60.$ The balance in her account has grown considerably over

the years, mainly due to long$-$term capital gains that occurred inside of the retirement account. How will the withdrawal

from the IRA be taxed?

It will be taxed as ordinary income and Ngoda will incur a $10\%$ early withdrawal penalty

The capital gain portion will be taxed at capital gains rates; withdrawals due to interest income over the years will be taxed at

ordinary rates

As ordinary income

The proceeds minus the basis is taxed at long$-$term capital gains rates