5-Year Rule for Roth IRA
Client, now age 65, established a Roth IRA in 2004. He wants to make a 2010 contribution (from earned income) to this account. Is this new contribution subject to the 5-year rule? Thanks.
Client, now age 65, established a Roth IRA in 2004. He wants to make a 2010 contribution (from earned income) to this account. Is this new contribution subject to the 5-year rule? Thanks.
Permalink Submitted by mk foss on Mon, 2011-01-10 23:19
No. He’s already been in a Roth for 5 years – he just goes through the 5-Year rule once for earnings.
Permalink Submitted by Alan Spross on Tue, 2011-01-11 02:19
Since client’s Roth is now fully qualified, all distributions are tax free and do not even need to be reported on Form 8606. He just shows the gross amount on line 15a of Form 1040, 15b blank.