Ryan, Age 48, Received an $8,000 Distribution from His Traditional

question 135

Essay

Ryan, age 48, received an $8,000 distribution from his traditional IRA to pay for medical expenses (above the 7.5% of AGI floor). Ryan has made only deductible contributions to the IRA and his marginal tax rate is 28 percent. What amount of taxes and early distribution penalties will Ryan be required to pay on the distribution, assuming the distribution is not a coronavirus-related distribution?

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Definitions:

Rib

A long, curved bone surrounding the chest cavity that protects the heart and lungs and serves as attachment for chest muscles.

Vertebra

One of the individual bones that form the vertebral column in vertebrates, providing structural support and protecting the spinal cord.

Intervertebral Foramen

The opening between adjacent vertebrae through which spinal nerves exit the spinal column.

Spinal Nerves

Nerves that originate from the spinal cord and branch out to various parts of the body, carrying messages to and from the brain.