Lisa, age 45, needed some cash so she withdrew $50,000 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 8 years ago. Through a rollover and annual contributions, she has contributed$80,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty?
A) $20,000.
B) $50,000.
C) $30,000.
D) $0.

Question

Quizplus · Accepted Answer

Since Lisa's Roth IRA has been established for more than 5 years, her contributions can be withdrawn tax-free and penalty-free. She has contributed $80,000, and her withdrawal of $50,000 is less than her total contributions, so it is not taxable or subject to penalty.

Lisa, Age 45, Needed Some Cash So She Withdrew $50,000