Which of the following tax treatments is NOT associated with a traditional IRA?

A traditional Individual Retirement Account (IRA) has several key tax treatments associated with it, and one of its main features is that contributions made to the account can often be tax-deductible, meaning you can reduce your taxable income in the year you make those contributions. Furthermore, the investments within a traditional IRA grow on a tax-deferred basis, meaning you do not pay taxes on capital gains, interest, or dividends as long as the money remains in the account.

When it comes to withdrawals, typically, distributions taken during retirement are subject to income tax, as they are considered taxable income at that time. This structure encourages individuals to save for retirement while deferring taxes until a time when they may be in a lower tax bracket.

The choice indicating "No taxes on contributions made" is not a tax treatment associated with a traditional IRA. Instead, contributions may be tax-deductible based on certain conditions, meaning taxes are not paid on the amount contributed in the year they are contributed. However, this does not imply that there are "no taxes" on those contributions; it means that individuals can potentially reduce their taxable income by the amount contributed if they meet specific eligibility requirements. Thus, this distinction clarifies why this statement does not accurately reflect the