Contributions to a Roth IRA: I. May be rolled-over from a regular IRA in a nontaxable transaction. II. May be tax deductible. III. Are not taxed when withdrawn if they have been in an established account for at least five years and the taxpayer is at least 591/2 before withdrawals are made.
A) Only statement I is correct.
B) Only statement II is correct.
C) Only statement III is correct.
D) Statements I, II, and III are correct.

Question

Quizplus · Accepted Answer

Contributions to a Roth IRA are not tax deductible, so statement II is incorrect. Roth IRA contributions can be rolled over from a regular IRA, but this is a taxable event, making statement I incorrect. Statement III is correct as withdrawals from a Roth IRA are tax-free if the account has been open for at least five years and the account holder is at least 59½ years old.