Which of the following are characteristics of a traditional IRA?
A)Most distributions made before age 59½ are subject to a 10 percent penalty tax.
B)A taxpayer must begin taking distributions from the IRA by age 75½.
C)Neither is a characteristic.
D)Both are characteristics.

Question

Quizplus · Accepted Answer

Distributions from a traditional IRA before age 59½ generally incur a 10% penalty tax, making option A correct. The age by which a taxpayer must start taking distributions, known as the Required Minimum Distributions (RMDs), has been updated to 72 for those born after June 30, 1949, not 75½ as stated, making option B incorrect.

Which of the Following Are Characteristics of a Traditional IRA