Which of the following is true regarding the taxation of traditional IRAs?

Insurance

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Which of the following is true regarding the taxation of traditional IRAs?

a. Contributions are made with after-tax dollars and interest earned is tax-deferred.

b. Contributions are made with pre-tax dollars and interest earned is tax-deferred.

c. Contributions are made with after-tax dollars, but interest is taxable in the year it is earned.

d. Contributions are made with pre-tax dollars, but interest is taxable in the year it is earned.

Answer: b. Contributions are made with pre-tax dollars and interest earned is tax-deferred.

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