Roth ordering rules
On the gains for a Roth that has been established for 5+ years but the owner is under 591/2 will there be income tax as well as the early distribution penalty?
Thanks
On the gains for a Roth that has been established for 5+ years but the owner is under 591/2 will there be income tax as well as the early distribution penalty?
Thanks
Permalink Submitted by Alan Spross on Tue, 2009-03-24 22:15
Yes, because the Roth is not yet qualified. Of course, the gains only come out after all regular and conversion contribution amounts have already been distributed. There are a couple exceptions that could come into play such as the first home purchase up to 10,000, under which gains would not be taxable or subject to penalty. There is also a disability exception.