Roth distribution on conversions from T-IRA
I’m 67 years old.
I have 6 Roth’s.
2 are from contirbutions and 4 are from conversions.
The conversion Roth’s I’m questioning about on withdrawal.
The Roth conversions from 2004 through 2010 of each year are all in one Roth.
Other three Roth’s are strictly used for single fund or stock moves. Makes it easier for Vanguard, CPA and IRS on re-characterizations.
[b]Question 1. Do I have to wait until 2015 to be able to withdraw from the 2004 through 2010 conversions without penalty ???????????
Question 2. What happens if I take the 2011 conversion Roth and add it to the 2004 thru 2010 Roth. Does a five year wait period start all over again ??????? [/b]
If this was answered in previous discussion, please direct me to the topic.
Thank You in advance for such an imformative forum.
Permalink Submitted by Alan Spross on Tue, 2012-07-10 19:24
Since you have obviously had a Roth IRA for over 5 years and are also over 59.5, all your Roth accounts are qualified and fully tax and penalty free. It does not matter which account you use to take distributions because for tax purposes all of your Roth IRAs are treated as if they were combined into a single large Roth. Since your Roths are all qualified, it also means that you do not need to use Form 8606 to report any distributions. You can just show the gross distribution on line 15a of Form 1040, -0- on 15b.
You can therefore also combine your Roth accounts into one or more if you choose to, and it will have no affect on the above. If you plan to do any more conversions, you might still want to convert into a new account and keep it separate until the recharacterization deadline passes for that conversion. You can then transfer that Roth into your larger Roth at that time. Your 2011 conversion recharacterization deadline is coming up on 10/15/2012. Fewer accounts also means it is easier to make sure that your beneficiary and/or contingent beneficiary designations are current.
It is better to combine your Roth accounts using a direct trustee transfer because the accounts are still subject to the one rollover limit per 12 months per account.
Permalink Submitted by John Keiler on Wed, 2012-07-11 15:44
THANK YOU ALAN
For your total dedication to this forum.
God Bless You
jjkthunder