Please answer 14 and 15

Question 14 (1 point) Freddie is age 58 and plays in a british rock band called King. Freddie does his own financial planning. He converted his IRA (traditional), valued at $25,000, to a Roth IRA. At age 62, Freddie took a distribution from this Roth IRA of $90,000 to pay purchase a new guitar. Freddie now feels he might have made a mistake that will cost him a lot of money in taxes and or penalties but he isn't quite sure. Please tell Freddie which of the following statements is/are true regarding his distribution for the guitar purchase? 1. Freddie is in lucky that he there are no taxes on the back end of a ROTH IRA. 2. Freddie's distribution came too soon after his conversion and this caused a taxable event causing the distribution to be treated as ordinary income. 3. Freddie will owe both a 10% penalty in addition to the ordinary income tax on the $65,0000 distribution. 4, Freddie will not owe a 10% penalty in addition to the ordinary income tax on the $65,0000 distribution DOLL Trixie Brockway: Attempt 1 1. Freddie is in lucky that he there are no taxes on the back end of a ROTH IRA. 2. Freddie's distribution came too soon after his conversion and this caused a taxable event causing the distribution to be treated as ordinary income. 3. Freddie will owe both a 10% penalty in addition to the ordinary income tax on the $65,0000 distribution. 4, Freddie will not owe a 10% penalty in addition to the ordinary income tax on the $65,0000 distribution. 1) 1 Only 2) 2 Only O 3) Both 2 and 4 4) 3 and 4 5) None of the statements are correct Question 15 (1 point) na qualified plan for 5 vears His AG DOLL 5) None of the statements are correct. Question 15 (1 point) Arnold had been an active participant in a qualified plan for 5 years. His AGI exceeded the thresholds to make deductible IRA contributions for those years, but he continued to make nondeductible IRA contributions totaling $15,000 (these were the only nondeductible contributions to the IRA - all other contributions were pre- tax). The value of the IRA is $120,000 and Arnold is over the age of 591/2 If he were to take a distribution of $12,0bo from his IRA how much would be taxable? 1) $2,000 2) $10,0000 3) $12,000 4) $0 Page 3 of 5 Previous Page Next Page DOLL