Go to Jeff Salisbury LWGate Home Page.From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: annual contribution to rollover Roth IRA
Date: Tue, 6 Apr 1999 22:43:31 -0400
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>As amended, however, it seems the five-year period begins with the >FIRST contribution an individual makes to *any* Roth IRA. Yes. Furthermore, withdrawals are deemed to be taken first from contributions, then from conversions, and finally from earnings. However, each conversion still carries an individual 5-year clock before the expiration of which the withdrawal of conversion money results in a penalty. This is to plug the loophole of people getting money out of a traditional IRA w/o paying the 10% penalty for early withdrawal by "laundering" the money through a Roth. But since contributions are considered to come out first, then conversions, regardless of what account either of them are in (or if they're in a single account), there's no tax reason to have multiple Roth accounts. Rich Carreiro rlcarr@animato.pn.com P5-100/RedHat Linux 4.2 - -
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