roth conversion after 59.5
60 yr old starts converting part of TIRA funds to Roth annually on 1-1-2016, does each conversion have its own 5 yr clock or can all gains be accessed tax free 5 yrs after 1st conversion on 1-1-2016.
60 yr old starts converting part of TIRA funds to Roth annually on 1-1-2016, does each conversion have its own 5 yr clock or can all gains be accessed tax free 5 yrs after 1st conversion on 1-1-2016.
Permalink Submitted by Alan - IRA critic on Fri, 2015-08-21 16:14
Conversions after 59.5 do not have a 5 year holding period for purposes of the 10% penalty since there is no penalty after 59.5. But you asked about taxes on Roth gains, and any gains will still be taxed if distributed before 5 years has passed from the year of the first Roth contribution of any type (regular contribution or conversion).
Permalink Submitted by Richard Poirier on Sat, 2015-09-12 17:37
Three years ago I had two strokes and somesday I think correctly (I hope!) and other days I don’t. I have made no changes since my strokes! My last conversions in 2010, 2011 & 2012. If I die yet in 2015, my sons for stuck taxes for these last 3 conversion years. If I die in 2016, two years of taxes for my sons. Am I correctly?
Permalink Submitted by Alan - IRA critic on Sat, 2015-09-12 18:04
No. Should you pass your Roth is entirely tax and penalty free for your beneficiaries because the 5 year holding period has already been completed. For distributions while you are alive, your Roth is fully qualified once you have passed age 59.5. If your sons are named as beneficiary, while their distributions will be tax free, they will have to take annual RMDs from their inherited Roth IRAs.