Which statement is correct regarding ROTH IRA distributions in 2026?
Explanation
A ROTH IRA under IRC §408A is funded with AFTER-TAX dollars (no current deduction) and offers tax-free 'qualified' distributions if two conditions are met: (1) the 5-TAXABLE-YEAR holding period beginning with the first Roth contribution (or conversion) has been satisfied AND (2) the distribution is made on or after the owner reaches age 59½, the owner's death, the owner's disability, or for a first-time-homebuyer purchase (up to a $10,000 lifetime cap). Qualified distributions are entirely income-tax-free and exempt from the 10% early-distribution penalty. Original ROTH IRAs are NOT subject to lifetime required minimum distributions (RMDs) for the owner. Option A is wrong; Roth contributions are not deductible. Option C ignores the qualified-distribution rules. Option D is wrong; SECURE 2.0 confirmed that Roth IRA owners face no lifetime RMDs (though beneficiaries do).
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