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socobert
Level 2

Five year rule on IRA conversions to Roth for Older Folks

My dad who is 70+ has money that he incrementally converted from a Traditional IRA into a Roth IRA account starting over 5 years ago, showing the amounts as income each year.  Some of the funds were converted over 5 years ago some less than 5 years ago.  Since he is over 59.5 years old does the 5 year rule on converted funds apply or can the entire account balance be removed from the Roth without penalty or tax?

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Accepted Solutions
dmertz
Level 15

Five year rule on IRA conversions to Roth for Older Folks

The 5-year rule for conversions no longer applies after age 59½.  The 5-year rule for converted amounts only serves to to eliminate an early-distribution penalty on converted amounts.  Amounts distributed after age 59½ are not early distributions.

 

Further, because your father is over age 59½ and he has met the separate 5-year rule for distributions to be qualified distributions, any distribution from his Roth IRAs is a qualified distribution, free of tax and penalty.

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1 Reply
dmertz
Level 15

Five year rule on IRA conversions to Roth for Older Folks

The 5-year rule for conversions no longer applies after age 59½.  The 5-year rule for converted amounts only serves to to eliminate an early-distribution penalty on converted amounts.  Amounts distributed after age 59½ are not early distributions.

 

Further, because your father is over age 59½ and he has met the separate 5-year rule for distributions to be qualified distributions, any distribution from his Roth IRAs is a qualified distribution, free of tax and penalty.

View solution in original post

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