Again on Roth 401k to Roth IRA Question
61 y.o. client opened a Roth IRA CD in 2007
Client has Roth 401k funds past the 5 year requirment
Client wants to open a NEW Roth IRA in 2013 for the purpose of investing in other than CD
Can client roll from Roth 401k to NEW Roth IRA without being subject to 5 year requirement?
It’s clear that she would not be if rolled to the one opened in 2007, but not clear if the new Roth IRA taking in the Roth 401k rollover would be or not – thanks much!
Permalink Submitted by Alan - IRA critic on Thu, 2013-10-17 00:00
Once any of a client’s Roth IRAs is qualified, all of them are qualified. He could open up as many new Roth IRA accounts as he wanted and no matter which he rolled the Roth 401k into, the funds are qualified and fully taxable. He would not even need Form 8606 to report distributions because of this. Any distributions should simply go on line 15a of Form 1040 with nothing on 15b.
Permalink Submitted by Nancy Fellinger on Fri, 2013-10-18 14:53
Thanks Alan!