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Question - Fred has an IRA. He lost his job in February 2018. Although Fred found another job in August, he did not have enough savings to cover expenses for his period of unemployment. Fred took a distribution of $8,000 from his IRA, used it on expenses, and decided to redeposit as much as he could before the end of the year. Since federal taxes of 20% were withheld, he received a net amount of $ 6,400. In December 2018, Fred contributed $6,400 to his IRA. Fred is 58 years old, earned wages of $25,000 for a year, and files as Married Filing Jointly. His wife Joan is 66. What will Fred's taxable income be for 2018?
A) $ 9,000
B) $ 1,300
C) $ 7,700
D) $ 8,000
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