Question

which of the following statements is not correct concerning how ira distributions are taxed. a, all IRAs are aggregated for distribution purposes. b, distribution are Eligible for capital gains treatment if the ira had capital gains. c, if the ira owner has basis then. part of the distribution will be taxable and part will be not taxable. dd,roth ira distributions cannot be used to satisfy an ira rmd

Answer 1

Solution: The statements that are not correct are “b” and “d”

b : Any capital gains on the earnings in the IRA account do not stand to gain from lower capital gains tax treatment; they are taxed at the same rate that is applicable in the case of the regular income. The only exception to that rule is when the contribution is to a traditional IRA using the money that has already been taxed . In other words when that contribution was made no tax deduction was claimed.

d : Roth IRAs are not subject to Required Minimum Distributions. That is not completely true or accurate. Roth IRAs are not subject to Required Minimum Distributions only during the lifetime of the owner. The IRA Distributions are subject to the Required Minimum Distributions after the death of the owner.