Permalink Submitted by Alan - IRA critic on Wed, 2013-01-30 21:48
If the withdrawal is limited to the amount of regular Roth IRA contributions, it is tax and penalty free. If all regular contributions have been withdrawn and conversions are withdrawn, the conversion is tax free, but conversions not held 5 years are subject to the 10% penalty. Last out would be earnings subject to both tax and penalty. The taxpayer must have kept track of his totals in those categories in order to properly report this distribution on Form 8606, but unfortuneately most taxpayers have not kept track and reseach must be done to determine these amounts.
Permalink Submitted by Alan - IRA critic on Wed, 2013-01-30 21:48
If the withdrawal is limited to the amount of regular Roth IRA contributions, it is tax and penalty free. If all regular contributions have been withdrawn and conversions are withdrawn, the conversion is tax free, but conversions not held 5 years are subject to the 10% penalty. Last out would be earnings subject to both tax and penalty. The taxpayer must have kept track of his totals in those categories in order to properly report this distribution on Form 8606, but unfortuneately most taxpayers have not kept track and reseach must be done to determine these amounts.
Permalink Submitted by Justin Whelan on Thu, 2013-01-31 16:57
thanks