Assignment 2 Answers

Assignment 2 Answers - IRACases 1. Anne Bolling, age 51,...

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IRA Cases 1. Anne Bolling, age 51, has decided to retire early from her current employment and annuitize the amount accumulated in her IRA by accepting equal periodic payments spread over her life expectancy. What income taxes and government penalty fees will be applicable to the $8,000 payment Anne receives this first year? Answer: The $8,000 will be includible in Anne’s gross income for federal income tax purposes. However, there will be no penalty for the liquidation before reaching age 59 1 2 because Anne has elected to retire from her current employment and to accept equal periodic payments to be spread over her life expectancy. 2. Tony Wishinski, age 54, terminates his current employment to help his son, age 27, launch his own business. Tony withdraws $65,000 from the $200,000 in his account under his employer’s qualified defined-contribution pension plan. What income and government penalty fees will be applicable to the $65,000 payment Tony receives this year? Answer:
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Assignment 2 Answers - IRACases 1. Anne Bolling, age 51,...

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