Roth Distribution Question
Client converted a traditional IRA to Roth in April 2011 and is over 59 1/2. The five year rule satisfied in January 2016, correct?
Client converted a traditional IRA to Roth in April 2011 and is over 59 1/2. The five year rule satisfied in January 2016, correct?
Permalink Submitted by Alan - IRA critic on Fri, 2015-12-11 23:30
There are two different 5 year holding periods. The one applying to individual conversions to avoid the 10% recapture tax no longer applies after age 59.5. The other 5 year holding period determines when the entire Roth IRA is qualified, meaning that the Roth earnings are also tax free. If this client had no Roth contributions prior to the 2011 conversion, their Roth will be fully qualified and tax free as of 1/1/2016.