- quote -

You may take a distribution of your contributions at any time, without tax or
penalty. You may not touch any accumulations unless they are excepted from
penalty (except rollovers as explained below):

In general, you do not include in your gross income qualified distributions
from your Roth IRA. You may have to include part of other distributions from
Roth IRA(s) in your income.

A qualified distribution is generally, any payment or distribution made after
the 5–taxable–year period beginning with the first year for which a
contribution was made to a Roth IRA set up for you, and that is made on or
after you reach age 59 1/2, made because you are disabled, made to a
beneficiary or to your estate after your death, or that is made to buy, build,
or rebuild a first home.

A distribution used to buy, build or rebuild a first home must be used to pay
qualified costs for the main home of a first time home buyer who is either
yourself, your spouse, or you or your spouse's child, grandchild, parent, or
other ancestor. When added to all your prior qualified first–time homebuyer
distributions, if any, the total distributions cannot be more than $10,000.

Part of any distribution that is not a qualified distribution may be taxable as
ordinary income and subject to the additional 10% tax on early distributions.
Distributions of conversion contributions within a 5–year period following a
conversion may be subject to the 10% early distribution tax, even if the
contributions have been included as income in an earlier year. Refer to Topic
558 , Early Distributions from IRA's, for more information.

If you converted your traditional IRA to a Roth IRA, but were not eligible to
do so, your conversion will be treated as a taxable distribution from your
traditional IRA and a regular contribution to your Roth IRA, and may be subject
to additional tax on early withdrawals and an excise tax on excess
contributions, unless the converted amount is recharacterized.

You may recharacterize your Roth IRA conversion by directly transferring the
amount converted (including all net earnings from the date of conversion) back
to a traditional IRA. You may do this prior to the due date, including
extensions, for filing your tax return. Show the conversion on Form 8606 (PDF).
Refer to the Form 8606 instructions for information on reporting
recharacterizations.

Refer to Topic 309 for information about Roth IRA contributions. For more
information about all types of IRAs, refer to Publication 590, Individual
Retirement Arrangements.

You may access these forms and publications at http://www.irs.gov

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

JFOREMAN10[at]houston.rr.com wrote:
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Yes, the simple answer is that the conversion dollars aren't available
without penatly for five years. But the complete answer is more
complicated than that. Rather than running through all the scenarios,
check IRS publication 590 which describes this stuff in detail
(www.irs.gov), or try www.rothiras.com.

-Tad

In years where I have a low salary I am thinking about converting part of my
SEP IRA to a Roth IRA. At that point is there a waiting period to withdraw
funds from the Roth IRA?


Thanks in advance,

James