MrsSoon Retired at Age 68 and Withdrew the Entire $77,100

question 105

Multiple Choice

Mrs.Soon retired at age 68 and withdrew the entire $77,100 balance from an IRA to buy a sailboat.She opened this account in 1999.Which of the following statements is false?

• A)If the account is a Roth IRA,none of the withdrawal is taxable.
• B)If the account is a traditional IRA to which Mrs.Soon made $32,000 nondeductible contributions,$45,100 of the withdrawal is taxable.
• C)If the account is a traditional IRA funded entirely with deductible contributions,the entire $77,100 withdrawal is taxable.
• D)None of the above is false.

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing ownership interest.

Par Value Common Stock

The nominal or face value assigned to shares of common stock in the corporate charter, which has little relation to the market value of the shares.

Paid-in Capital

Funds received from investors during equity issuances, contributing to a company's equity beyond the initial stock value.