At the end of 2014,Erin was 73 years old and her traditional IRA had a balance of $200,000.She properly withdrew $8,403 from her IRA in 2015.In 2015,her IRA assets earned $25,000.What amount must Erin take as a distribution from her IRA in 2016?

Question

Quizplus · Accepted Answer

To calculate the required minimum distribution (RMD) for 2016, we need to use the following formula:

RMD = (IRA balance on December 31st of previous year) / distribution period

Erin's distribution period for 2016 can be found in the Uniform Lifetime Table in IRS Publication 590-B. At age 74, her distribution period is 23.8 years.

Using the formula, we get:

RMD = ($200,000 + $25,000 - $8,403) / 23.8
RMD = $216,597 / 23.8
RMD = $9,097.07

Therefore, Erin must take a distribution of $9,097.07 from her IRA in 2016. However, the answer choices don't match this number exactly. The closest option is B) $9,458, which may be the result of rounding up. Therefore, B) is the best choice.

At the End of 2014,Erin Was 73 Years Old and Her