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Hello JA Customer,
Anytime that you actually withdraw money from your IRA account, the amount you withdraw must be included as part of your taxable income for the year. If you are under age 59-1/2 at the time the withdrawal is made, an additional 10% early withdrawal penalty also applies.
The rate of tax that you would pay on the withdrawal depends on how much other income you and your wife have total for the year, as that it what ultimately determines the tax bracket you are in.
Just so you know, you do not have to actually withdraw money from your IRA account to purchase a CD. You can have your IRA custodian use the funds in your IRA account to purchase a CD on your behalf and simply let the CD remain part of your IRA account, in which case no taxes would be due because you would not actually be withdrawing the money from the the account.
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Thank you JA Customer