Roth IRA partial 60 day rollover
If I take $5k in roth contributions; $10k in roth conversion under 5 yrs and $2k in earnings and I do a partial 60 day rollover of say $8k, what am I rolling back? Contrib, conversion or earnings??
I can’t seem to find the answer anywhere…………. Yet. One would think the distribution rules would 1st rule. So $5k of the 8 would be basis and the next $3k would be from the conversion basis. Got that….
But when the 60 day rollover comes back into the roth, what does that represent? Would it work in reverse order… earnings rolled 1st and then conversion?
Thoughts?
Permalink Submitted by Alan - IRA critic on Thu, 2013-08-22 19:03
No, the reported rollover of 8k would be ignored, leaving a Form 8606 distribution of 9k under the ordering rules. 5k of the distribution coming from regular contributions would be tax and penalty free, and 4k would come from conversions subject to a 10% penalty. Effectively, if you thought about it that way, the rollover would be composed of reverse ordering rule dollars, but it is simpler to just deal with the portion not rolled over as if only 9k was distributed.