This week’s study question from the Solomon Online Exam Simulator question database is now available.
All the following statements regarding Roth IRAs are correct EXCEPT:
A. Contributions to a Roth IRA are tax deductible up to specified limits
B. Earnings in a Roth IRA accrue income tax-free
C. Distributions from a Roth IRA may be tax-free
D. Roth IRAs are subject to the same contribution limits as regular IRAs
Correct Answer: A. Contributions to a Roth IRA are tax deductible up to specified limits
Rationale: Roth IRAs are individual retirement accounts that are funded with after-tax contributions. Individuals can contribute to their Roth IRAs up to the IRS maximum contribution limit. Earnings within the Roth IRA accrue tax-free and distributions from the Roth IRA may also be tax-free when certain criteria are met.
Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.