Lars Withdrew $20,000 from a Retirement Account and Used the Money

question 6

Essay

Lars withdrew $20,000 from a retirement account and used the money to buy a new car.Assuming that his marginal rate on ordinary income is 28%,compute the tax cost of the withdrawal in each of the following cases.
a.Lars is 40 years old.He withdrew the money from a personal savings account.
b.Lars is 40 years old.He withdrew the money from his employer-sponsored qualified plan after resigning from his job.
c.Lars is 65 years old.He withdrew the money from a Roth IRA.

---

Definitions:

Trial Balance

A ledger balance sheet summarizing all accounts, showing equal totals for both credit and debit columns.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.

General Ledger

A comprehensive record of all financial transactions that occur within a business, sorted by account.