Roth IRA withdrawals–Tax implications.
I would like clarification on the tax implications of a 60yr old who made his 1st Roth IRA contribution 5k on 12/21/2007, and his second contribution of 6k on 1/3/08.
If he makes a contribution on 12/21/2007 and another on 1/3/08, and then waits until 1/3/09 to make another contribution. What occurs tax wise if he decides to withdraw all of the funds on 12/21/2012?
Is the contribution and earnings from 12/21/2007 the only amounts he is available to withdraw tax free?
or does all of his contributions individually have a 5 year waiting period, before he may withdraw the funds tax free?
Permalink Submitted by Edward Czapor on Fri, 2008-01-04 02:35
His first contribution in 2007 starts the five year holding period as of 1/1/07 for all contributions. If he withdraws in 2012 all distributions will be qualified (tax and penalty free) because he has satisfied the 5 year holding and he is over 591/2.