Common use of Taxation of Traditional IRA Distributions Clause in Contracts

Taxation of Traditional IRA Distributions. The taxation of Traditional IRA distributions depends on whether or not you have ever made nondeductible Traditional IRA contributions. If you have only made deductible contributions, all Traditional IRA distribution amounts will be included in income. If you have ever made nondeductible contributions to any Traditional IRA, the following formula must be used to determine the amount of any Traditional IRA distribution excluded from income: NOTE: Aggregate nondeductible contributions include all nondeductible contributions made by you through the end of the year of the distribution that have not previously been withdrawn and excluded from income. Also note that the aggregate IRA balance includes the total balance of all of your Traditional and SIMPLE IRAs as of the end of the year of distribution, plus any distributions occurring during the year.‌‌‌