Which of the following statements regarding Roth IRAs distributions is true?
A) A taxpayer receiving a distribution from a Roth IRA before reaching the age of 55 is generally not subject to an early distribution penalty.
B) A distribution is not a qualified distribution unless the distribution is at least two years after the taxpayer has opened the Roth IRA.
C) A Roth IRA does not have minimum distribution requirements.
D) The full amount of all nonqualified distributions is subject to tax at the taxpayer's marginal tax rate.

Question

Quizplus · Accepted Answer

Roth IRAs do not have minimum distribution requirements, making them a popular retirement savings option for individuals who want to control when and how much they withdraw from their accounts. Choices A, B, and D are all false. A taxpayer receiving a distribution from a Roth IRA before reaching the age of 59 ½ is generally subject to a 10% early distribution penalty unless it is a qualified distribution, which includes distributions made after the taxpayer has held the account for at least five years, as well as distributions due to death, disability, or certain first-time homebuyer expenses. There is no two-year waiting period before a distribution can be qualified. Finally, the tax treatment of nonqualified distributions depends on the amount of contributions and earnings in the account and whether the taxpayer has taken any previous distributions, among other factors.

Which of the Following Statements Regarding Roth IRAs Distributions Is