In article <%oxbl.17772$Ws1.4924[at]nlpi064.nbdc.sbc.com> ,
Mark Bole <makbo[at]pacbell.net> wrote:
- quote -


Good point. Thanks.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Arthur Kamlet wrote:

- quote -

Just to clarify, there is a separate 5-yr clock for *each* tax year in
which there was a conversion. If there weren't, everyone would make one
tiny little Roth conversion as early in life as possible, and then at
any time after the first 5 years, they could drain all their pre-tax
accounts without penalty by simply converting the balance and paying tax
only, and then immediately withdrawing without penalty. As it is, the
five-year clock for conversions *does* give you a way to withdraw
unlimited amounts of Trad. IRA money penalty-free before age 59.5, as a
long as you pay the ordinary tax and then wait five years. (And, of
course, follow the ordering rules for Roth IRA distributions).


- quote -

It can be relevant if you think you might recharacterize a Roth
conversion (which can normally be done up to six months after the
unextended filing deadline). This is not common, but it pays to allow
for the possibility.

Unless you kept your conversion investments segregated from one another,
when you recharacterize you must average the earnings (gain or loss) to
be withdrawn over all investments converted. (See Notice 2000-39 and TD
9056 for more technical information and examples).

This is somewhat analogous to what happens on Form 8606 when you
distribute Traditional IRA money -- tax effect is pro-rated.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Jan 13, 9:14*pm, kam...[at]panix.com (Arthur Kamlet) wrote:
- quote -

Thanks for the confirmation.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Ernie Klein wrote:
- quote -

Exactly, and to add a thought here, it's pointless to create a new
(traditional) account for post-tax IRA money as this is tracked by the
8606. Many do this, but once earnings accrue, it's still the forms you
need to refer to for money that shouldn't be taxed at withdrawal.

Joe

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article
<132bef5b-bbdb-4529-8f92-c85e58f21a67[at]t26g2000prh.googlegroups.com> ,
joeu2004 <joeu2004[at]hotmail.com> wrote:

- quote -

You really have only 1 Roth IRA (or Traditional IRA for that matter).
You can have that IRA spread over as many different accounts, brokers,
and custodians as you want, but your IRA consists of the total of all
the accounts.

--
-Ernie-

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <132bef5b-bbdb-4529-8f92-c85e58f21a67[at]t26g2000prh.googlegroups.com> ,
joeu2004 <joeu2004[at]hotmail.com> wrote:
- quote -


True, for your Roth IRA accounts for moneys contributed,
including earnings on those contributions.

The five year clock for the first Roth contribution
starts Jan 1 of the tax year for the first contribution.


So if your very first IRA contribution ever was April 15, 1999
for tax year 1998, the clock begins January 1, 1998 for that
contribution and all later contributions.

You could also have converted traditional IRA amounts to
Roth IRA accounts and, if under age 59 1/2, there is a separate
five-year clock for all of those conversions and their earnings.

Your Roth IRA is an Individual Retirement Arrangement, which may
have any number of individual accounts. Your job is to keep track
of the Roth

+ Contributions, and their earnings, and also
+ Conversions, and their earnings.


For income tax purposes, it is irrelevant whether you have one
or many Roth IRA accounts, or even if you have accounts containing
both contributions and conversions.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In trying to answer someone's questions in another NG, I came
up with some questions of my own -- just academic curiosity.
I could not find the answers in IRS Pub 590.

(I suggested that the OP post his questions here. But I
haven't seen them.)

Suppose I open and contribute to one Roth IRA (IRA-1) more
than 5 years ago, then I open and contribute to another Roth
IRA (IRA-2) less than 5 years ago.

When can I start withdrawing from IRA-2 tax-free and without
penalty, assuming that none of the exceptions applies (IRS
Pub 590, pg 66?

The question is: generally, is there a separate 5-year clock
for each Roth IRA, or does the 5-year clock start with the
first contribution to any one of several Roth IRAs?

IRS Pub 590 pg 65 states that a qualified distribution is any
payment from "your" Roth IRA that, inter alia, is made after
the 5-year period beginning with the first taxable year for
which a contribution was made to "a" Roth IRA set up up for
your benefit.

It says "a" Roth IRA, not "the" or "that" Roth IRA. Sounds
like the 5-yr clock for all Roth IRAs starts at the beginning
of the first taxable year in which a contribution was to any
Roth IRA. Right?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >