JulieS
Expert Alumni

Retirement tax questions

Yes, the funds leaving your Traditional IRA are a distribution. When they are properly converted to your Roth account, they are a conversion. 

 

That makes the distribution taxable, but not subject to a penalty.

 

The five-year rule doesn't apply since you didn't take a distribution from your Roth. 

 

The purpose of Form 8606 is to let the IRS know what‌ occurred with this distribution, which is that it's a conversion. 

 

Don't worry, the IRS will understand this. 

 

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