A 60 -year-old individual nearing retirement withdraws $⁢15,000 from their traditional IRA to pay for college expenses for their dependent child. What are the taxes and penalties on this withdrawal?

Because the individual is 60, they are older than 59½, so the withdrawal is not subject to the 10% early-withdrawal penalty. However, money withdrawn from a traditional IRA is generally taxable as ordinary income. Therefore, the withdrawal has no penalty but is taxed as ordinary income.

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