Mindy, who is 44 years old, has five IRAs. On January 12th, she converts $40,000 in IRA 2, which is a traditional IRA, into a Roth IRA. On March 25th, she takes a distribution of $20,000 from IRA 1. On May 20th, she rolls over the $20,000 into IRA 4. Which of the following statements is correct? Mindy owes tax and penalty on $40,000 Mindy owes tax and penalty on the $20,000 because it represents her second rollover during the year. The $20,000 rollover qualifies for the 60-day rollover exception. Mindy owes ordinary income tax on $60,000 but no penalty.

Mindy, who is 44 years old, has five IRAs. On January 12th, she converts $40,000 in IRA 2, which is a traditional IRA, into a Roth IRA. On March 25th, she takes a distribution of $20,000 from IRA 1. On May 20th, she rolls over the $20,000 into IRA 4. Which of the following statements is correct? Mindy owes tax and penalty on $40,000 Mindy owes tax and penalty on the $20,000 because it represents her second rollover during the year. The $20,000 rollover qualifies for the 60-day rollover exception. Mindy owes ordinary income tax on $60,000 but no penalty.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 2CPA: Ryan is 39 years old and works as a real estate agent. Ryans marginal tax rate is 24%. Ryan has a...

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