[quote=”gibbs71a@”]I am 60, retired with no more earned income, and soon plan to do a partial conversion ($50k of unsold stock) from my traditional IRA to a Roth IRA. I plan to make similar partial conversions each year for the next several years. Both IRAs will be with my same self-serve broker. This will be my first conversion so I would like to ask a few questions to ensure that I am doing this right.
1) I plan to hold each year’s converted amount in the Roth for at least five years. However, could I take out money from my Roth (ex post-conversion earnings) tax and penalty free — if it has been in the Roth less than five years?
2) If a penalty would be assessed (#1 above), is there a way to avoid a penalty on the brokerage fee that would be due on any stock sale/purchase within the Roth? Could I pay the brokerage fee with money outside of the Roth to avoid the withdrawal penalty?
3) At my age, do “ordering rules” (e.g., first-in-first-out) apply to any withdrawals?
4) If the answer to #3 is yes, how can this be accomplished in light of the fact that I may buy and sell stocks in the Roth (I assume I can do this) and sometimes have a cash balance from multiple sales?
5) When stock from a T-IRA is transferred into a Roth, how is the stock valued? I have heard that it is the closing cost of the stock from the previous day. Is this correct?
6) Finally, when is the federal tax due on a conversion? I assume it will be due on or before the next quarterly estimated tax deadline (e.g., 4/10 conversion: tax due 4/15; 4/16 conversion: tax due 6/15).
Thank you in advance for your response![/quote]

Since you are at least age 59 ½, you will never owe the 10% penalty on any amount that you withdraw.
All you need to do is keep track of what is earnings (in your Roth IRA) as far as the ordering rules are concerned. The rest of your Roth IRA balance can be withdrawn at anytime, tax and penalty-free: under the ordering rules, you would be distributing your earnings last, and everything else before.
Since you are doing a conversion, then you should be eligible to make a regular contribution ( as you would be under the income maximum) if you have eligible compensation. As such, your five year period can start the earlier of :
—-01/01/ of this year, when you convert (assuming that this is your first conversion), or
—-01/01/ of last year, if you make a contribution by April 15 for last year
—-01/01/ of an earlier year, if you made a regular contribution for that year
Once your Roth IRA has met the five year requirement (starting with one of the years above- whichever applies), you no longer need to keep track of earnings as all your distributions would now also be tax-free. If you withdraw the earnings before your first Roth IRA has aged five years, you will pay income tax on the earnings only.
The stock is valued as of the close of business on the day the movement occurs.
Generally, the tax is due by your tax filing due date for filing your tax return for the year the conversion occurs. If you are required to pay estimated tax, the answer may be different…maybe someone familiar with tax payment requirements will comment.

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