Roth IRA account early withdraw penalty if I have multiple IRA account

[wanghaojie630]

I have several Roth IRA account with different broker. I closed one of my IRA account and transfer the money to a regular account. I know when you take money out of IRA, IRS will assume you take your post tax contribution first, then your profit. But if I close one account, does IRS assume I take all the profit for this account too? Even though I still have post tax contribution in other IRA account? Also, if I made another contribution to IRA account later the year, does IRS still charge penalty?

[dmertz · Accepted solution]

The tax code and the IRS treat all of your Roth IRAs together as if they were one large IRA, so your Roth IRA contribution and conversion basis applies to all of your Roth IRA accounts in aggregate.  After entering the Form 1099-R for the distribution, be sure to click the Continue button on the Your 1099-R Entries page and proceed to where TurboTax asks you to enter your basis.

Since you have sufficient basis in Roth IRA contributions to avoid any of your Roth IRA being taxable, taking the regular distribution from a Roth IRA does not affect your eligibility to make a Roth IRA contribution  Any Roth IRA contribution for 2018 will add to your contribution basis that will apply to any 2018 Roth IRA distributions.

[wanghaojie630]

Thanks, that answered exactly my questions