Roth IRA

Question 1

A shareholder has redeemed money from their Roth IRA. This distribution will be reported
on this tax form ____________.

Answer 1

1099-R

Question 2

The Distribution Ordering Rule for a Roth IRA is _______________. This is the order that
the IRS uses to determine tax liability on a Roth IRA.

Answer 2

Contributions, then Conversions, then Earnings

Question 3

The “penalty” tax incurred for a non-qualified premature distribution from a Roth IRA is
_________.

Answer 3

10 percent

Question 4

If a 30-year-old shareholder takes a non-qualified distribution from a Roth IRA, they may
be required to pay ______________.

Answer 4

Taxes on earnings

Question 5

When an IRA owner converts a Traditional IRA to their Roth IRA the 5-year holding period
for the conversion starts as a separate calendar.

Answer 5

True

Question 6

I am 60 years of age and I have been contributing to a Roth IRA for the last 3 years. I
want to fully redeem my account. Will I have any taxes or penalties due?

Answer 6

Yes, the contributions portions of the account will be tax and penalty free, but you may
have taxes due on the earnings portion because it was not in a Roth IRA for 5 years.

Question 7

A Roth IRA owner who removes an excess contribution, including any earnings made,
from their Roth IRA prior to their tax filing deadline, including extension, will be assessed
which penalty by the IRS?

Answer 7

No penalty

Question 8

An investor has contributed $15,000 to a Roth IRA for the past 10 years and the account is
now worth $20,000. The investor is 60 years old and is going to fully redeem the account to
fund an Asian tour. The investor will likely pay _______________.

Answer 8

No tax and no penalties