Is it tax free to take distribution from gains from Roth IRA when 50 years old?

[NCperson · Accepted solution]

@denamck no, it is not.  Here is how it works when you are under 59.5 years old.

1) Withdrawing money originally contributed is tax free and penalty free. 

2) Withdrawing money originally converted from a Trad IRA to a Roth IRA that has NOT been in the Roth for five calendar years is subject to the 10% penalty, but no normal tax; The remaining dollars (those in the Roth for less than 5 years) are subject to the 10% penalty.  If the money was after tax dollars converted from a Trad IRA (think back door conversion, there is no 10% penalty on these dollars).  

3) withdrawing the earnings is subject to both normal tax and the 10% penalty. 

The IRS assumes that all the dollars in 1) are withdrawn first, then all the dollars in 2) are withdrawn next and lastly, the earnings are withdrawn.