Steven Is 27 Years Old and Has a Total AGI

question 36

Multiple Choice

Steven is 27 years old and has a total AGI of $110,000 in 2018.He contracts pneumonia in 2018 and incurs a medical bill that totals $7,500.He withdraws $7,500 from his traditional IRA to pay the bill.Which of the following is true?

• A)He is not subject to penalties on the IRA withdrawal because it was for medical expenses.
• B)He is not subject to penalties on the IRA withdrawal because he was disabled by pneumonia for 2 weeks.
• C)He is subject to penalties on the IRA withdrawal because a person may not take a withdrawal from a traditional IRA until they are 59½ years old no matter what.
• D)He is subject to penalties on the IRA withdrawal because the withdrawal did not cover a portion of medical bills that exceeded 7.5 percent of his AGI.
• E)None of the above is correct.

---

Definitions:

Annual Dividend

The total dividend payment a shareholder receives from a company over one fiscal year.

Increasing the Dividend

The action by a company to raise the amount of money paid to shareholders out of its profits on a per-share basis.

Rate of Return

The rate at which an investment gains (or loses) value over a specified period, expressed as a percentage.

Growth Rate

A percentage figure indicating the rate at which a company's revenue or earnings are increasing over a specific period, typically used as a measure of a company’s financial health or performance.