Question

Aaron retired at the age of 63. The current balance in his Roth IRA is $140,000. Aaron established the Roth IRA eight years ago. Through a rollover and annual contributions, Aaron has contributed $70,000 to his account. If Aaron receives a $60,000 distribution from the Roth IRA, what amount of the distribution is taxable

Answer 1

$0

Step-by-step explanation:

In this question, we are to calculate or state the taxable amount out of the amount of money paid to Aaron from the ROTH IRA

To answer this question, we consider using the ROTH IRA five years rule.

Under this rule, distribution from ROTH IRA is free from tax when this is established at least five years before any amount is withdrawn. In this case Roth IRA was established 8 years ago and Aaron was also 63 (more than 59.5 of age) hence $60000 is not taxable