SIE practice questionmediumRetirement Account Taxation
Which statement best describes distributions from a traditional IRA?
- ATaxed at capital gains rates
- BAlways tax-free
- CTaxable as ordinary income when withdrawn at retirement age✓ Correct answer
- DSubject to double taxation
Explanation
Why C — Taxable as ordinary income when withdrawn at retirement age
Withdrawals from traditional IRAs are taxable as ordinary income; they are not always tax-free or subject to capital gains rates. Tax is not applied twice on withdrawals.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Account Types questions
- If an account’s equity falls below the maintenance margin requirement, the broker-dealer will:
- Which customer is eligible to open a margin account?
- A brokerage account owner can transfer assets at death directly to a chosen person by designating a:
- Which form of account ownership enables a deceased’s share to pass to his or her estate?
- Which statement is true about fiduciary accounts?
- What is a primary benefit of a Transfer on Death (TOD) account registration?
- Which account type allows two or more adults to share ownership with equal rights to trade securities?
- An investor who wants professional management and diversification should consider opening which account?