Solved: Does having a previous Roth IRA count towards the 5 year holding period?
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jharriger
New Member

Does having a previous Roth IRA count towards the 5 year holding period?

Had a Roth IRA from 2005 through 2009 that I took a full distribution from and closed.  Was not taxed/penalized because I held it for 5 years & it had lost money.  The IRS tried to say I owed taxes, but a tax advocate helped me prove otherwise.  Opened a new Roth in 10/2013 and had contributed $13,000 through 2017.  I turned 59 1/2 in 08/2017.  Took a distribution of $15,300 in 11/2017.  This wasn't a full distribution and the account is still open.  My 1099-R box 7 has a code of T. TurboTax says I don't owe taxes even though I've only had the current Roth for 4 years, if I calculated it right, and I took some earnings.  Is that because of the previous Roth I had?  If I answer the question of whether I had a Roth before 2013 as no, my refund goes way down, so I assume that's the case.  If so, does it matter that it was closed?  Want to make sure this is right so I don't have to fight the IRS again.  Thanks!

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Accepted Solutions
dmertz
Level 15

Does having a previous Roth IRA count towards the 5 year holding period?

Having made a Roth IRA contribution in 2005 means that you have satisfied the 5-year rule to make distributions after age 59½ be qualified distributions, entirely tax free, despite having a zero Roth IRA balance in the interim.  In TurboTax, click the Continue button on the Your 1099-R Entries page and in the questions that follow indicate that you had a Roth IRA prior to 2013.

Section 408A(d)(2) defines a qualified distribution.  (Specifically see 408(d)(2)(B):

https://www.law.cornell.edu/uscode/text/26/408A#d_2

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2 Replies
dmertz
Level 15

Does having a previous Roth IRA count towards the 5 year holding period?

Having made a Roth IRA contribution in 2005 means that you have satisfied the 5-year rule to make distributions after age 59½ be qualified distributions, entirely tax free, despite having a zero Roth IRA balance in the interim.  In TurboTax, click the Continue button on the Your 1099-R Entries page and in the questions that follow indicate that you had a Roth IRA prior to 2013.

Section 408A(d)(2) defines a qualified distribution.  (Specifically see 408(d)(2)(B):

https://www.law.cornell.edu/uscode/text/26/408A#d_2

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jharriger
New Member

Does having a previous Roth IRA count towards the 5 year holding period?

Thanks for your help, dmertz!
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