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Fed income tax on Roth per 5 year rule

I have a Roth IRA I opened in 2006 and have converted some stock from trad ira. Do I have to hold the stock for 5 years or just the $ amount at time of conversion or neither?  I am 73 yrs old. 

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3 Replies
DanaB27
Expert Alumni

Fed income tax on Roth per 5 year rule

Neither, your distributions will be Qualified Distributions.

 

"A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

  1. It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit.
  2. The payment or distribution is:
    1. Made on or after the date you reach age 59½,
    2. Made because you are disabled (defined earlier),
    3. Made to a beneficiary or to your estate after your death, or
    4. One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit)." (Pub 590-B)

 

 

 

Please see Distributions of conversion and certain rollover contributions within 5-year period for additional information, but be aware this applies only to distributions that aren't a Qualified Distribution.
 

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Fed income tax on Roth per 5 year rule

DanaB27,

 

Thank you much for your reply. Just to be clear, because I am >59 1/2 (actually 73) I can roll $ from Trad IRA into Roth, pay the tax due, and withdraw $ immediately, correct?

 

Bill

BrittanyS
Expert Alumni

Fed income tax on Roth per 5 year rule

That is correct.  Once you are over the age of 59 1/2 you can withdrawal from a traditional IRA penalty free.  You will just paid tax on the distributions.  For more information, see the link below:

 

IRA withdrawals

 

@willie49 

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