Roth Conversion
If a person does a Roth conversion over a number of years, does each conversion have its own 5 year “hold” period? Also, can the converted principal amount be accessed without taxes or penalty as long as “gain” is left in the Roth?
If a person does a Roth conversion over a number of years, does each conversion have its own 5 year “hold” period? Also, can the converted principal amount be accessed without taxes or penalty as long as “gain” is left in the Roth?
Permalink Submitted by Edward Czapor on Mon, 2007-12-10 19:55
Yes, each conversion has it’s own 5 year holding period for penalty purposes. The converted principal amount can be withdrawn at any time without tax, but not necessarily without penalty. Each conversion must be held for the 5 year period for the converted amount to be penalty free unless age 591/2 or one of the penalty exceptions is met.