Jeremy, Age 38, Has $25,000 in a Traditional IRA Account

question 61

Essay

Jeremy, age 38, has $25,000 in a traditional IRA account and is considering taking the money out to buy himself a new car. What will be the tax consequences to Jeremy if he withdraws the $25,000 from his IRA in 2016 for this purpose? Explain.

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Definitions:

La Belle Indifference

A term used in psychology to describe a condition where a person is inappropriately indifferent to their physical symptoms or disability.

Conversion Disorder

A disorder classified in the group of somatic symptom and related disorders in DSM-5, characterized by motor symptoms or disturbances in sensory functioning that appear to be a result of a neurological problem, but for which no physical cause can be found.

Dissociative Identity Disorder

A psychiatric disorder characterized by the presence of two or more distinct personality states within the same individual, often as a result of severe trauma.

SSRIs

Selective Serotonin Reuptake Inhibitors, a class of drugs often prescribed for depression and anxiety disorders, which work by increasing serotonin levels in the brain.