ON JULY 27, 2011 CLIENT CLAIMS SHE DID NOT KNOW SHE WOULD BE TAXED ON THE DISTRIBUTION FROM HER IRA AND FEELS SHE WAS MISLED BY THE FINANCIAL ADVISOR. CLIENT CLAIMS THIS COST HER $11,000 IN TAXES AND WOULD NOT HAVE DONE THIS IF SHE UNDERSTOOD SHE WOULD INCUR TAXES. CLIENT CLAIMS SHE LATER LEARNED SHE COULD HAVE TAKEN FROM THE ROTH WITHOUT BEING TAXED.

$11,000.00

EDWARD JONES DENIES THE REQUEST FOR THE REIMBURSEMENT OF TAXES INCURRED AS A RESULT OF THE 2011 DISTRIBUTION TAKEN FROM THE CLIENT'S IRA. DUE TO CLIENT'S DISABILITY STATUS, SHE WANTED TO TAKE A DISTRIBUTION FROM HER IRA ACCOUNT WHILE SHE COULD TAKE ADVANTAGE OF AVOIDING THE EARLY WITHDRAWAL PENALTY DUE TO THE ALLOWED DISABILITY EXCEPTION. THE PENALTY EXCEPTION WAS REVIEWED WITH CLIENT AT THAT TIME AND BECAUSE SHE DID NOT KNOW HOW MUCH TO WITHHOLD FOR TAXES, IT WAS DETERMINED CLIENT WOULD ELECT TO WITHHOLD NO TAXES. THE FINANCIAL ADVISOR STATED THE CLIENT WAS MADE AWARE THERE WOULD BE NO PENALTY ON THE WITHDRAWAL; HOWEVER, THERE WAS NO DISCUSSION ABOUT TAXES NOT BEING INCURRED BY THE CLIENT. CLIENT EXECUTED THE IRA WITHHOLDING ELECTION/CHANGE FORM ON JULY 27, 2011 WHICH REFLECTED HER ELECTION TO NOT WITHHOLD TAXES. FURTHER, THE DOCUMENT REFLECTS THE CLIENT UNDERSTOOD THAT FEDERAL TAXES MAY BE INCURRED AND SHE IS LIABLE FOR THE PAYMENT OF SAID TAXES ON THE TAXABLE PORTION OF THE DISTRIBUTION. DUE TO THE AMOUNT CLIENT WISHED TO WITHDRAW ($25,000) AND BECAUSE THE PURPOSE OF TAKING THE DISTRIBUTION WAS TO TAKE ADVANTAGE OF THE PENALTY EXCEPTION DUE TO CLIENT'S DISABILITY STATUS, THE DISTRIBUTION WAS TAKEN FROM THE IRA ACCOUNT. ALTHOUGH DISTRIBUTIONS CAN BE TAKEN FROM A ROTH ACCOUNT WITH NO EARLY WITHDRAWAL PENALTY, IT WOULD NOT REQUIRE CLIENT TO MEET AN ALLOWED EXCEPTION SUCH AS BEING DISABLED AND THE FUNDS WERE NOT SUFFICIENT FOR THE AMOUNT THE CLIENT WANTED TO WITHDRAW .