"Phil Marti" <prm20871[at]verizon.net> wrote:

- quote -

Yes, it is a Roth. It just _seems_ like it was 10 years
ago :-)

- quote -

OK. That's the part I was confused about. Thanks.

--
-Ernie-

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- quote -

Yes. One 5 year period for all Roth accounts. BTW, you
couldn't have a Roth more than 10 years old since they first
appeared in 1998. Make sure the credit union account you
referenced is really a Roth.

- quote -

No. One 5 year Roth period, period.

What becomes an issue with conversions that's not an issue
with contributions is the premature distribution penalty.
It's a different 5 year peiod than the plain vanilla Roth 5
year period, and it applies only if you're under 59 1/2. If
you're under 59 1/2 the conversion must age 5 years before
you can withdraw without penalty.

If you're over 59 1/2 and have met the Roth 5 year test, all
distributions from any Roth account, regardless of how it
was funded, are "qualified" and, thus, tax-free.

--
Phil Marti
Clarksburg, MD

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"Jane" <googlemail2003[at]yahoo.com> wrote:

- quote -

It's there in the discussion of ordering rules, but maybe a
"picture" will be easier. Get Form 8606 and its
instructions and check out the portion where you report
nonqualified Roth distributions and compute the taxable
portion.

--
Phil Marti
Clarksburg, MD

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"Phil Marti" <prm20871[at]verizon.net> wrote:

- quote -

I asked this question before and I am still confused.

I have had a (small) Roth in my Credit Union for over 10
years. My understanding is that should I open another Roth
say at Schwab and fund it from earned income, then I am
already covered by the 5 year wait period. Is that correct?

But if I fund it by converting some or all of my existing
Traditional IRA (also at Schwab) then the 5 year wait begins
anew. Is that correct?

--
-Ernie-

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- quote -

Page 60, "Are Distributions Taxable?"

I believe if you open the roth and are not 59-1/2, then the
money had to age 5 years to avoid penalty.

JOE

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"taxxcpa" <taxxcpa[at]sbcglobal.net> wrote:

- quote -

There seems to be a lot of confusion about this.

The 5-year rule is essential for a distribution to be
"qualified" and, thus, tax-free. However, not all
nonqualified distributions are subject to the premature
distribution penalty.

With the exception of conversions withdrawn within 5 years
after the conversion, the penalty applies only to the
taxable portion of the distribution. The ordering rules for
nonqualified distributions take contributions first. There
is no taxable distribution when a contribution is withdrawn,
period. Thus, if only contributions are withdrawn, there's
no taxable income and no penalty.

--
Phil Marti
Clarksburg, MD

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"Shyster1040" <Shyster1040[at]nospamhotmail.com> wrote:

- quote -

You mean page 58 where it says
"You can make contributions to a Roth IRA for a year at any
time during the year or by the due date of your return for
that year (not including extensions)."?

--
Phil Marti
Clarksburg, MD

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<bono9763[at]yahoo.com> wrote:

- quote -

Not true. Extensions don't extend the last date for vanilla
IRA contributions. See IRS Publication 590.

--
Phil Marti
Clarksburg, MD

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"Shyster1040" <Shyster1...[at]nospamhotmail.com> wrote:

- quote -

Instructions say "Not including extensions."

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bono9763[at]yahoo.com wrote:
- quote -

(snipped)

You say until the extended time for an IRA? When did this
change?

ChEAr$,
Harlan Lunsford, EA n LA
(are we having fun,yet?)

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"Jane" <googlemail2...[at]yahoo.com> wrote:

- quote -

As you can see I have received conflicting advice. Some say
I can withdraw my contributions any time. Others say I have
to wait five years. I have read publication 590 and either
I can't find the answer or, if it's there I don't understand
it.

Can someone point out where in that publication it gives me
the answer.

Thanks

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Jane wrote:

- quote -

You must hold it five years to qualify for penalty-free
withdrawals. After you meet the holding period for the first
Roth IRA, all future Roth IRAs are treated as having met
this rule.

Once you meet the five-year rule you can withdraw amounts
contributed without penalty if under 59 -- but not earnings
or conversions from previously-existing IRAs.

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Provided you otherwise qualify (e.g., meet the income
limitations), you can open a ROTH IRA and make a
contribution for 2006 up until the due date, including
extensions, of your 2006 tax return (i.e., April 17, 2007,
unless you get an extension of time to file). See IRS Pub.
590, page 58.

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"Jane" <googlemail2003[at]yahoo.com> wrote:

- quote -

Yes

- quote -

not less than 5 years and > 59 1/2

Is there a penalty if I am not 59 1/2?

Yes

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- quote -

One of the beauties of the Roth IRA is that you can withdraw
your contributions (but NOT your interest) penalty-free at
any time.

More than you ever wanted to know about Roth IRAs
http://www.rothira.com/

--
John D. Goulden

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"Jane" <googlemail2...[at]yahoo.com> wrote:

- quote -

You have until the deadline (including extensions) for
filing to open and fund an IRA, either Roth or traditional.
For 2006 tax year, you have until April 17, 2007 or October
15, 2007 if you file for an extension. So yes, you can still
open a Roth for 2006.

When you contribute to a Roth IRA, you can take out your
contributions without tax or penalty up to the amount you
contributed. There is no age restriction for this. If you
converted a traditional IRA to a Roth IRA, you have to wait
5 years before being able to draw out money tax or
penalty-free. If you have a Roth IRA that has both
contributions and conversion money in it, your withdrawals
are considered to be first from your contributions, then
from your conversions.

Dennis

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"Jane" <googlemail2003[at]yahoo.com> wrote:

- quote -

Yes, through April 17.

- quote -

Any time you like.

- quote -

Not on withdrawn contributions.

--
Phil Marti
Clarksburg, MD

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Sorry to ask such obvious questions. I tried reading the IRS
publications but they are too much for me to understand.

Can I still open a ROTH IRA for year 2006?

If I contribute $4000 when can I withdraw any or all of that
original $4000? Is there a penalty if I am not 59 1/2?

Thanks

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