Heidi Has Contributed $20,000 in Total to Her Roth 401(k)

Multiple Choice

Heidi has contributed $20,000 in total to her Roth 401(k) account over a six year period. In 2014, 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