Which of the following statements is (are)true with regard to Roth IRAs?
I.The portion of a Roth IRA distribution that is attributable to investment income is taxable.
II.There is a maximum income level above which Roth IRA contributions are not allowed.

Question

Quizplus · Accepted Answer

Statement I is false. The portion of a Roth IRA distribution that is attributable to investment income is not taxable, as long as certain requirements are met (such as being over age 59 1/2 and having held the account for at least 5 years).

Statement II is true. There are income limits that determine how much you can contribute to a Roth IRA each year. For 2021, the maximum contribution for individuals with a modified adjusted gross income (MAGI) of less than $125,000 is $6,000 ($7,000 for those age 50 and older). For individuals with a MAGI between $125,000 and $140,000, the contribution limit is gradually reduced, and above $140,000, Roth IRA contributions are not allowed.

Which of the Following Statements Is (Are)true with Regard to Roth