What amount of the total distribution received by Charles is subject to the early distribution penalty?

To determine the amount of the total distribution that is subject to the early distribution penalty, it's essential to understand the general rules surrounding early withdrawals from retirement plans. Typically, if an individual under the age of 59½ takes a distribution from a qualified retirement plan, such as an IRA or a 401(k), a 10% early withdrawal penalty may apply to the taxable portion of the distribution.

In this scenario, if Charles received a total distribution of $169,000 and a portion of that is considered taxable due to it being an early distribution, then we focus on how much of that total amount falls into the taxable category.

Assuming there are no exceptions to the penalty, the entire amount that is not classified under exceptions (such as disability, a first-time home purchase, or certain medical expenses) represents a taxable early distribution. If we conclude that the total amount of the distribution received was not tax-free or eligible for any exceptions, then the entire distribution would be subject to the penalty.

Therefore, if none of the distribution fell under the exceptions for penalty-free withdrawals, the full amount of $169,000 would be the correct answer regarding what is subject to the early distribution penalty because it reflects the total taxable amount received by Charles at