<esantoro[at]poczta.onet.pl> wrote:

- quote -

No tax penalty. The custodian may charge a fee.

- quote -

Since it was a Roth IRA, she never had a tax deduction, so
the amount of her contribution comes out tax-free. The only
thing she'll owe tax on is the withdrawn earnings. See Part
III of Form 8606, which is where you calculate the taxable
part of a Roth distribution..

--
Phil Marti
Clarksburg, MD

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esantoro[at]poczta.onet.pl wrote:

- quote -

I can't speak for any withdrawal penalties imposed by the
financial institution, but tax-wise most of the account
balance (contributions) can be withdrawn tax and
penalty-free. She already paid tax on that money when she
opened the account.

Any earnings in the account will be subject to ordinary
income tax, as the account has not been open for 5 years.
That will be reported on Line 15b of the 1040 form.

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I'm trying to help a retired parent navigate her Roth IRA.
There's not much money here. She opened it when she was 62.
It's now a year later and she needs to close the account
and use the few thousand dollars in it.

Will there be any penalties for closing the account only a
year or so after opening it. She's 63 years old. I'm
figuring that she'll simply have to add the withdrawal to
the curent year's income for tax purposes.

Thanks so much for your help.

ES

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