Tyson (48 years old)owns a traditional IRA with a current balance of $50,000. The balance consists of $30,000 of deductible contributions and $20,000 of account earnings. Convinced that his marginal tax rate will increase in the future, Tyson receives a distribution of the entire $50,000 balance of his traditional IRA and he immediately contributes the $50,000 to a Roth IRA (not a coronavirus-related distribution). Assuming his marginal tax rate is 25 percent, what amount of penalty, if any, must Tyson pay on the distribution from the traditional IRA?

Question

Quizplus · Accepted Answer

Tyson is not subject to a penalty because he rolled over the entire balance of his traditional IRA to a Roth IRA within 60 days.

Tyson (48 Years Old)owns a Traditional IRA with a Current