Which of the Following Is True About Future Qualified Distributions

question 31

Multiple Choice

Which of the following is true about future qualified distributions from a Roth IRA by a person who will be 65 years old at the time the distributions begin? Assume the individual opened the account before age 60.

• A)The entire amount of the distributions will be tax-free.
• B)Only the accumulated earnings will be tax-free.
• C)Only the previous contributions will be tax-free.
• D)The entire amount of the distribution will be taxable.

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Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period, providing insight into its financial health and liquidity.

Internal Rate Of Return

The discount rate at which the net present value of all the cash flows from an investment equal zero.

Present Values

The current worth of a future sum of money or stream of cash flow given a specified rate of return.

Expected Value Analysis

A statistical technique used to calculate the average outcome when the future includes scenarios that may or may not happen.