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 eight years ago. Through aconversion 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)$0.
B)$20,000.
C)$30,000.
D)$50,000.

Question

Quizplus · Accepted Answer

Since Lisa withdrew only her contributions of $80,000 which she already paid taxes on, there is no taxable portion of the distribution. Additionally, since Lisa is over age 59 1/2, there is no early distribution penalty. Therefore, the answer is $0.

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