Which of the following statements are true about a traditional IRA?
I. Subject to an income limit,in 2011 a single person could contribute up to $5,000 per year of pretax income to an IRA.
II. All withdrawals are tax-free.
III. Earnings on the IRA account are not taxed until withdrawn.
IV. You must begin withdrawals at age 59 ½.
V. Withdrawal(s)can be a lump sum or installments.

Question

Quizplus · Accepted Answer

Statement I is true, but it should be noted that there are some exceptions to the income limit in certain circumstances.
Statement II is false, as all withdrawals from a traditional IRA are subject to income tax.
Statement III is true, as earnings on the IRA account are not taxed until they are withdrawn.
Statement IV is true, as required minimum distributions must begin at age 72.
Statement V is true, as withdrawals can be in a lump sum or installments.

Which of the Following Statements Are True About a Traditional