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Business, 18.08.2019 03:20 leslcookie23

Tyson (48 years old) owns a traditional ira with a current balance of $50,000. the balance consists of $30,000 of deductible contributions and $20,000 of account earnings. tyson's marginal tax rate is 25%. convinced that his marginal tax rate will increase in the future, tyson receives a distribution of the entire $50,000 balance of his traditional ira. he retains $12,500 to pay tax on the distribution and he contributes $37,500 to a roth ira. what amount of income tax and penalty must tyson pay on this series of transactions? a. $0 income tax; $0 penalty. b. $12,500 income tax; $1,250 penalty. c. $12,500 income tax; $3,000 penalty. d. $12,500 income tax; $5,000 penalty.

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