Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,900 to the Roth IRA ($4,300 a year). The current value of the Roth IRA is $17,500. In the current year, Sherry withdraws $15,200 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $15,200 withdrawal will she retain after taxes to fund her car purchase? Amount of withdrawal Non-taxable amount Amount subject to tax Tax rate Penalty rate Tax Penalty After tax withdrawal retained $ 0 % %

On June 30, 2019, Kelly sold property for 240,000 cash and a 960,000 note due on September 30, 2020. The note will also pay 6% interest, which is slightly higher than the Federal rate. Kellys cost of the property was 400,000. She is concerned that Congress may increase the tax rate that will apply when the note is collected. Kellys after-tax rate of return on investments is 6%. a. What can Kelly do to avoid the expected higher tax rate? b. Assuming that Kellys marginal combined Federal and state tax rate is 25% in 2019, how much would the tax rates need to increase to make the option identified in part (a) advisable?

Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,800 to the Roth IRA ($4,600 a year). The current value of the Roth IRA is $21,700. In the current year, Sherry withdraws $19,400 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $19,400 withdrawal will she retain after taxes to fund her car purchase? Amount of withdrawal Non-taxable amount Amount subject to tax Tax rate Penalty rate Tax Penalty After tax withdrawal retained $ 0 % %

Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,900 to the Roth IRA ($4,300 a year). The current value of the Roth IRA is $17,500. In the current year, Sherry withdraws $15,200 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $15,200 withdrawal will she retain after taxes to fund her car purchase?

Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $13,200 to the Roth IRA ($4,400 a year). The current value of the Roth IRA is $21,100. In the current year, Sherry withdraws $18,800 of the account balance to purchase a car. Assuming Sherry's marginal tax rate is 24 percent, how much of the $18,800 withdrawal will she retain after taxes to fund her car purchase? Amount of withdrawal Non-taxable amount Amount subject to tax $ Tax rate % Penalty rate Таx Penalty After tax withdrawal retained

George (age 42 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and his IRA is now worth $25,000. He is planning on converting the entire balance to a Roth IRA account. George's marginal tax rate is 24 percent. a. What are the tax consequences to George if he takes $25,000 out of the traditional IRA and contributes the entire amount into a Roth IRA one week after receiving the distribution? Tax Payable=? Penalty=? b. What are the tax consequences to George if he takes $25,000 out of the traditional IRA, pays the taxes due from the traditional IRA distribution, and contributes what's left from the distribution to the Roth IRA one week after receiving the distribution? Tax Payable=? Penalty=? c. What are the tax consequences to George if he takes $25,000 out of the traditional IRA, keeps $10,000 to pay taxes and to make a down payment on a new car, and contributes what's left from the distribution to the Roth IRA one week after receiving…

Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $37,000. She is trying to decide whether she should convert her traditional IRA into a Roth IRA. Her current marginal tax rate is 24 percent. She plans to withdraw the entire balance of the account in 20 years, and she expects to earn a before-tax rate of return of 4.7 percent on her retirement accounts and a 3.7 percent after-tax rate of return on all investments outside of her retirement accounts. For each of the following alternative scenarios, indicate how much more or less Yuki will accumulate after taxes in 20 years if she converts her traditional IRA into a Roth IRA. Be sure to include the opportunity cost of having to pay taxes on the conversion. (Use Table 1.) (Round your intermediate calculations and final answers to the nearest whole dollar amount.) a. When she withdraws the retirement funds in 20 years, she expects her marginal tax rate to…

[The following information applies to the questions displayed below.] Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $50,000. She is trying to decide whether she should convert her traditional IRA into a Roth IRA. Her current marginal tax rate is 24 percent. She plans to withdraw the entire balance of the account in 20 years, and she expects to earn a before-tax rate of return of 5 percent on her retirement accounts and a 4 percent after-tax rate of return on all investments outside of her retirement accounts. For each of the following alternative scenarios, indicate how much more or less Yuki will accumulate after taxes in 20 years if she converts her traditional IRA into a Roth IRA. Be sure to include the opportunity cost of having to pay taxes on the conversion. Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. a. When she withdraws the…

Yuki (age 45 at year-end) has been contributing to a traditional IRA for years (all deductible contributions), and her IRA is now worth $50,000. She is trying to decide whether she should convert her traditional IRA into a Roth IRA. Her current marginal tax rate is 24 percent. She plans to withdraw the entire balance of the account in 20 years, and she expects to earn a before-tax rate of return of 5 percent on her retirement accounts and a 4 percent after-tax rate of return on all investments outside of her retirement accounts. For each of the following alternative scenarios, indicate how much more or less Yuki will accumulate after taxes in 20 years if she converts her traditional IRA into a Roth IRA. Be sure to include the opportunity cost of having to pay taxes on the conversion. When she withdraws the retirement funds in 20 years, she expects her marginal tax rate to be 18 percent. Accumulation if she keeps funds in traditional IRA ____________________ Accumulation if she converts…

Brooklyn has been contributing to a traditional IRA for seven years (all deductible contributions) and has a total of $30,000 in the account. In 2021, she is 39 years old and has decided that she wants to get a new car. She withdraws $20,000 from the IRA to help pay for the car. She is currently in the 24 percent marginal tax bracket. What amount of the withdrawal, after tax considerations, will Brooklyn have available to purchase the car? After tax withdrawal