Language and Boolean Logic

  • Thread starter skeptic2
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  • #1
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Main Question or Discussion Point

The following is from regulations regarding setting up a Roth IRA

"Withdrawal of earnings prior to five years and age 59½ are subject to penalty and income tax."

I read that to mean:
Withdrawal of earnings (prior to five years) AND (prior to age 59½) are subject to penalty and income tax.

If I withdraw the earnings either prior to five years OR prior to age 59½, but not both, are they exempt from income tax?
 

Answers and Replies

  • #2
lisab
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Boolean AND/OR confusion aside, that sentence doesn't make sense to me. "Withdrawal of earnings prior to five years..." Five years of what? Retirement? It's not clear what they mean.

(As an aside: I'm fairly comfortable with math, but put a $ in front of the numbers and my brain flatlines!)
 
  • #3
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Checking on the IRS's website I found the following clarifications.
1. The five years is from Jan 1 of the year that the first contribution is made.
2. I found no statement similar to the above. Instead they provide a flowchart of all the possibilities showing whether taxes or penalties must be paid. In either case, prior to 5 years OR prior to age 59½ taxes and penalties apply.

It is amazing how easy it is for language to misrepresent the meaning. Could this be because OR in common usage usaually means either/or and AND often means and/or?
 
  • #4
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(As an aside: I'm fairly comfortable with math, but put a $ in front of the numbers and my brain flatlines!)
But isn't putting $ in front of a number signify that it is HEX :biggrin:

$A04E
 
  • #5
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The Roth IRA account has to be open for at least 5 years.
 

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