5-year rule switching custodians
If a client over 59.5 opens a Roth IRA, converts a portion of their IRA to a Roth in 2021 at custodian A and then transfers the Roth IRA to custodian B, will the 5-year rule still be based on the year the Roth was established in custodian A?
Permalink Submitted by Alan - IRA critic on Wed, 2021-12-29 19:55
Yes. A change of custodians has no effect on the holding period for a Roth IRA. This applies to both the holding period for qualified distributions or for each conversion contribution with respect to the 10% penalty.