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, any Traditional IRA distribution will be fully 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to determine the amount of any IRA distribution excluded from income: (Aggregate Nondeductible Contributions) x (Amount Withdrawn) = Amount Excluded from Income Aggregate IRA Balance NOTE: Aggregate nondeductible contributions include all nondeductible contributions made by you through the end of the year of the distribution (which have not previously been withdrawn and excluded from income). Also note that aggregate IRA balance includes the total balance of all of your IRAs as of the end of the year of distribution and any distributions occurring during the year.

Appears in 4 contracts

Samples: cdn.cocodoc.com, Combined Listed, www.firsttrustretirement.com

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