not 591/2 yet but want to pay tuition out of Roth IRA
can it be done without any penalty if show proof directly to the IRS?
Publication 590 page 66 does not have any exceptions for education to waive penalty.
Help.
can it be done without any penalty if show proof directly to the IRS?
Publication 590 page 66 does not have any exceptions for education to waive penalty.
Help.
Permalink Submitted by Alan Spross on Wed, 2011-04-27 23:01
The qualified higher eduction exception is listed on p 67 of Pub 590.
That said, under the ordering rules any regular contributions come out first and these are always tax and penalty free. Next is conversions starting with the oldest but if a conversion has not met the 5 year holding requirement, the higher education exception will waive the 10% penalty for withdrawing conversions in less than 5 years. Then earnings come out last and they would be taxable, but the higher education exception would again waive the 10% penalty on any earnings.
Form 8606 would be required to report the Roth distribution and Form 5329 would be required to show the education exception (Exception Code 08) if any penalty otherwise applied.