Distribution is taxable and early distribution penalty

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Reference no: EM131943125

1. Jane purchased the following shares of Alpine stock:

54 shares for $1,546.49 in 2012, 67 shares for $1,798.59 in 2013, and

98 shares for $2,435.37 in 2014.

She sold 133 shares of Alpine in 2016 and did not identify which shares she sold. What basis should she use for computing gain or loss.

2. Jamie is 42 years old and received a $20,000 distribution from his Roth IRA, established in 2009. At the time of the distribution, the Roth IRA account totaled $33,748: $18,000 regular contributions, $10,000 taxable conversion contributions made in 2014, and $5,748 earnings. How much of his distribution is taxable and subject to the early distribution penalty?

$0 taxable; $0 penalized.

$0 taxable; $2,000 penalized.

$0 taxable; $20,000 penalized.

$2,000 taxable; $2,000 penalized.

Reference no: EM131943125

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