Heidi, Age 45, Has Contributed $20,000 in Total to Her

question 5

Multiple Choice

Heidi, age 45, has contributed $20,000 in total to her Roth 401(k) account over a six-year period. When her account was worth $50,000 and Heidi was in desperate need of cash, Heidi received a $30,000 nonqualified distribution from the account (not a coronavirus-related distribution) . How much of the distribution will be subject to income tax and 10 percent penalty?

• A)$0.
• B)$10,000.
• C)$12,000.
• D)$18,000.
• E)$30,000.

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Definitions:

Variable Costs

Expenses that vary directly with the amount of production output.

Total Costs

Total costs encompass the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Average Total Costs

The total cost of production divided by the number of units produced, representing the per-unit production cost.

Marginal Costs

The charge for generating one more unit of a product or service.