Heidi has contributed $20,000 in total to her Roth 401(k) account over a six year period. In 2015, when her account was worth $50,000 and Heidi was in desperate need of cash, Heidi received a $30,000 nonqualified distribution from the account. How much of the distribution will be subject to income tax and 10% penalty?

Heidi has contributed $20,000 in total to her Roth 401(k) account over a six year period. In 2015, when her account was worth $50,000 and Heidi was in desperate need of cash, Heidi received a $30,000 nonqualified distribution from the account. How much of the distribution will be subject to income tax and 10% penalty?

Heidi has contributed $20,000 in total to her Roth 401(k) account over a six year period. In 2015, when her account was worth $50,000 and Heidi was in desperate need of cash, Heidi received a $30,000 nonqualified distribution from the account. How much of the distribution will be subject to income tax and 10% penalty?


A. $0

B. $10,000

C. $12,000

D. $18,000

E. $30,000


Answer: D


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