pro rata rule
Definition
A rule that applies to distributions from Individual Retirement Accounts (IRA) that have been funded with both pre-tax and after-tax contributions. Upon withdrawal, pre-tax contributions are taxed as ordinary income and after-tax contributions are not taxed. The pro rata rule requires that any withdrawal include a proportionate amount of taxable and non-taxable funds.
Related Articles
- Exercising Options Involves Many Choices *
- Basics of The Value Investing Stock Strategy *
- Introduction to Commodities *
- Principles of Investing *
- Tax Issues Related to Your Business *
- Keoghs and Their Distribution Options *
- What are Stock Option Plans? *
- Fundamental Analysis *
Related Videos
http://www.businessdictionary.com/definition/pro-rata-rule.html
