Re: Contributions to a Roth Conversion IRA

From: "L. Chen" <am302@freenet.buffalo.edu>
Subject: Re: Contributions to a Roth Conversion IRA
Date: Wed, 6 Jan 1999 21:13:11 -0500 (EST)

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> >...................
> >What are the pros and
> >cons of making future contributions to my conversion acount?
> 
> There are no cons.  The change treats all Roth IRA accounts as a single entity
> (just like all traditional IRA accounts are a single entity) and imposes
> ordering rules on them (you are deemed to be withdrawing *contributions*
> first, then *conversions*, then earnings, regardless of which account you take
> money from). 

Let's say I 

1.  convert $10K to Roth in 1998
2.  contributed $2K/yr in 1999 and 2000 to Roth
3.  convert another $5K to Roth in 2000
4.  Withdraw $15K in 2004

Would $14K or $15K of the withdrawal be tax-free?

i.e. The clock for the 5yr penalty-free withdrawal for the 1998 conversion
starts to run on 1/1/98.  How about the conversion in 2000 -- 1/1/98 or
1/1/2000 ?? 

TIA

Chen




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