Mike (age 40)is purchasing his second home for $200,000 with a 25% down payment.He will withdraw some of the down payment from his IRA.He will have to pay ____ on the IRA withdrawal.
A)federal income taxes
B)an early withdrawal penalty
C)social security taxes
D)a and b
E)a, b, and c

Question

Quizplus · Accepted Answer

When withdrawing funds from an IRA before the age of 59.5, the account holder will have to pay both federal income taxes and an early withdrawal penalty. Therefore, the best choice(s) would be option D, which includes both options. Social security taxes do not apply to IRA withdrawals.

Mike (Age 40)is Purchasing His Second Home for $200,000 with a 25