Qualified ROTH IRA
I have a client with a ROTH IRA that was converted in 2018 more than 5 years ago. Our home office is telling us that it is not a Qualified ROTH account because we executed a direct transfer in 2023 to our broker dealer. I feel that this information is incorrect. Can you please clarify and confirm?
Thank you,
Denise Sowell
Permalink Submitted by Alan - IRA critic on Tue, 2025-10-07 11:22
A Roth owner must be 59.5 or disabled in addition to the 5 years for the Roth to be qualified. It does not matter which custodian holds the Roth IRA, therefore rollovers or direct transfers do not affect the qualification requirements in any way.
That said, the current custodian will usually not code a 1099R with the Q code if that current custodian has not held the Roth 5 years. They use Code T instead, but if the Roth owner knows that they have held any Roth IRA for over 5 years and are 59.5 or disabled they can treat a distribution as qualified per the 8606 Instructions. In that case, an 8606 would not need to be filed, and the Roth distribution would only show on line 4a of Form 1040 with the taxable line 4b blank.
Permalink Submitted by Denise Sowell on Tue, 2025-10-07 13:57
Thank you for that clarification.
Denise