Question 56 of 100 Oh: 36m: 30s Michael, a 49-year-old mechanic, has an IRA that he contributes to on a regular basis. Michael decides to buy himself a brand new motorcycle so he takes a $5,000 distribution from his IRA to make the down payment. Which of the following is true? Michael will owe a $500 penalty, and must include the amount of the distribution in taxable income. Michael can't take a distribution from his IRA at all since he isn't at least 59.5 years old. Michael is allowed to take the withdrawal, without penalty, since the IRA is not an employer sponsored plan. Michael will pay a penalty for early withdrawal, but only if he doesn't repay the money to the IRA within one year. Open Book Exam