Retirement and Other Insurance Concepts
What IRS penalty tax applies to premature distributions taken from a Traditional IRA before age 59.5 unless a statutory exception applies?
Answer and explanation
Answer: D. Early withdrawals before 59.5 are subject to ordinary income tax plus a 10% IRS penalty tax unless an exception (e.g. disability, first home) applies.Source: IRS Publication 590-B — Early Distribution Penalty
More retirement and other insurance concepts questions
- What conversion right do covered children have when reaching the age limit under a family rider?
- What disclosure document must be delivered to a consumer prior to or at the time of purchase of a variable annuity under federal securities law?
- What does it mean for a worker to be fully insured for Social Security survivor benefits?
- What happens in a life settlement transaction?
- What IRS exclusion ratio formula is used to determine the tax-free portion of non-qualified annuity payments received during annuitization?
- What is the primary tax feature of contributions made to a qualified Traditional IRA by an eligible individual?
590 Texas questions like this one.
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