Use RIA Checkpoint to answer the following questions.

17. Olivia, who is 28 years old, wants to purchase a home for herself but does not have any money for a down payment, except for what she has in her Individual Retirement Account (IRA). While Olivia knows she will have to pay income tax on any money she withdraws from the IRA, she wants to know whether she will also have to pay a 10% penalty for withdrawing the money before she turns 59 . Assume that Olivia wishes to withdraw $25,000 from her IRA for the down payment and that Olivia is a first time home buyer. How much of Olivias withdrawal will be subject to the 10% penalty?

a. $15,000.

b. $10,000.

c. $25,000.

d. zero.

18. Nancy believes her income for 2023 will be just enough to push her into a higher tax bracket. Nancy wants to know if making a contribution to a Roth IRA will help reduce her taxable income for 2023. In other words, Nancy wants to know if contributions to Roth IRAs are tax deductible. What do you tell her?

a. No, contributions to Roth IRAs are not deductible.

b. Yes, contributions to Roth IRAs are deductible.

c. Contributions to Roth IRAs are deductible as long as the contribution is considered regular.

d. Contributions to Roth IRAs are deductible as long as the contribution is considered a qualified rollover contribution.