In 2017, Rashaun (62 years old) retired and planned on immediately receiving dis

Question

In 2017, Rashaun (62 years old) retired and planned on immediately receiving distributions (making withdrawals) from his traditional IRA account. The balance of his IRA account is $162,000 (before reducing it for withdrawals/distributions described below). Over the years, Rashaun has contributed$43,202 to the IRA. Of his $43,202 contributions, $27,702 was nondeductible and $15,500 was deductible. Assume Rashaun did not make any contributions to the account during 2017

b. If Rashaun currently withdraws $81,000 from the IRA, how much tax will he be required to pay on the withdrawal if his marginal tax rate is 28 percent?

Amount of Withdrawal Ratio of nondeductible contributions: Non-deductible contributions Total IRA account balance 0 % Non-taxable $0 Taxable Tax Rate % Tax $0

Explanation / Answer

Please find the solution in the same format required, along with formula used to derive at the numbers are given. Kindly let me know in case further details are required.

Amount of Withdrawal (A) 81000 Ratio of nondeductible contributions: D=B/C Non-deductible contributions (B) 27702 Total IRA account balance (C) 162000 17.10 % Non-taxable E=A*D $13,851 Taxable F=A-E $67,149 Tax Rate G 28 % Tax F*G $18,802

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