Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,000 to the Roth IRA ($4,000 a year). The current value of the Roth IRA is $16,300. In the current year, Sherry withdraws $14,000 of the account balance to purchase a car. Assuming Sherry’s marginal tax rate is 24 percent, how much of the $14,000 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 $12,000 to the Roth IRA ($4,000 a year). The current value of the Roth IRA is $16,300. In the current year, Sherry withdraws $14,000 of the account balance to purchase a car. Assuming Sherry’s marginal tax rate is 24 percent, how much of the $14,000 withdrawal will she retain after taxes to fund her car purchase?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sherry, who is 52 years of age, opened a Roth IRA three years ago. She has contributed a total of $12,000 to the Roth IRA ($4,000 a year). The current value of the Roth IRA is $16,300. In the current year, Sherry withdraws $14,000 of the account balance to purchase a car. Assuming Sherry’s marginal tax rate is 24 percent, how much of the $14,000 withdrawal will she retain after taxes to fund her car purchase?
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