Question 2751 pts

In 2021, Candice was 40 years old. She withdrew $10,000 from her Individual Retirement Account, which is a qualified retirement plan. She spent the $10,000 on a vacation. What are the Federal Income Tax consequences of the $10,000 withdrawal?

Group of answer choices

Candice includes the $10,000 in her Adjusted Gross Income, and has an additional $1,000 penalty tax.

Candice includes the $10,000 in her taxable income, but she is not subject to a penalty tax.

Candice includes $0 in her taxable income, and has an additional $1,000 penalty tax.

Candice includes $0 in her taxable income and is not subject to a penalty tax.