I just need the answer to the question that is underlined, please!  Samuel, age 32, loses his job in a corporate downsizing. As a result of his termination, he received a distribution of the balance in his § 401(k) account of $20,000 ($25,000 − $5,000 Federal income tax withholding) on May 1, 2020. Samuel’s marginal tax rate is 24%. What effect will the distribution have on Samuel’s gross income and tax liability if he invests the $20,000 received in a mutual fund? Gross income: $25,000 Tax liability: $6,000  Same as part (a) except that Samuel invests the $20,000 received in a traditional IRA within 60 days of the distribution. Gross income= $5,000 (amount not invested) Tax liability= $1,200 Same as part (a) except that Samuel invests the $20,000 received in a Roth IRA within 60 days of the distribution. Gross Income= $25,000 Tax Liability= $6,000 How could Samuel have received better tax consequences?

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 35P
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I just need the answer to the question that is underlined, please!

 Samuel, age 32, loses his job in a corporate downsizing. As a result of his termination, he received a distribution of the balance in his § 401(k) account of $20,000 ($25,000 − $5,000 Federal income tax withholding) on May 1, 2020. Samuel’s marginal tax rate is 24%.

  1. What effect will the distribution have on Samuel’s gross income and tax liability if he invests the $20,000 received in a mutual fund?
  • Gross income: $25,000
  • Tax liability: $6,000 
  1. Same as part (a) except that Samuel invests the $20,000 received in a traditional IRA within 60 days of the distribution.
  • Gross income= $5,000 (amount not invested)
  • Tax liability= $1,200
  1. Same as part (a) except that Samuel invests the $20,000 received in a Roth IRA within 60 days of the distribution.
  • Gross Income= $25,000
  • Tax Liability= $6,000
  1. How could Samuel have received better tax consequences?
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