Transferring Roth IRA to new account at another brokerage

[Strouth64]

Hello.  I will turn 60 in a few months. I opened a Roth IRA with Ameritrade in 2004. In 2020, I transferred the funds from my Ameritrade Roth to a new Roth IRA that I set up at Vanguard.  Given the 5 year rule for qualified withdrawals, I assumed that the account opening date associated with the funds coming from the Ameritrade account would be passed to Vanguard so that this date could be reported to the IRS along with any withdrawal information (similar to how cost basis information is passed when stock is transferred from one brokerage to another so that gains can be reported). So, Vanguard is telling me that they only have the date my Roth IRA account was opened with them and that they do not capture the date the account was opened from the source of the transferred assets.  So how is the account opening date of the original ROTH IRA with Ameritrade captured and reported to the IRS to show that the 5 year period has been satisfied? I closed the account with Ameritrade after the Vanguard account was opened, so I no longer have access to account information for that account.

[Critter-3]

You are correct in that the 5 year time clock carries with the transfer.   The fact that the new custodian will not acknowledge it is immaterial ... YOU know what the start year was so when asked by the program you are responsible for entering the information yourself  (which you should have saved somewhere/somehow if the IRS was ever to question it).

[dmertz · Accepted solution]

The 5-year clock for qualified Roth IRA distribution is associated with you, not with any particular one of your Roth IRA accounts.  Since your first Roth IRA contribution was made for 2004 (or maybe even 2003), you have long since satisfied the 5-year clock, even for future Roth IRA accounts you might open and even if you had an intervening period where you had no money in Roth IRAs.

Any particular Roth IRA custodian will use code Q instead of code T for distributions after you have reached age 59½ only if you have had a Roth IRA with them for at least 5 years (and might only use code Q for particular accounts that have individually been held for 5 years).  That doesn't matter, though, because you have met the 5-year requirement.

TurboTax asks if you have had a Roth IRA for 5 years.  Answering Yes caused TurboTax to treat code T the same as code Q and does not report anything on Form 8606 Part III for the qualified distribution.  TurboTax simply omits the qualified Roth IRA distribution from Form 1040 line 4b.

[Strouth64]

Thank you. I was informed by Vanguard today that the IRS should have a history of my Roth IRA contributions, so they can verify when I made my first contribution, since I did not retain any records.  Is that indeed the case?

[NCperson]

@Strouth64 do you have any paperwork from even 2017 that shows the account was open?  Roth accounts opened anytime in 2017 have now satisifed the 5 year rule...why would finding something from 2003 be neccessary?

[dmertz]

The IRS will have received from the IRA custodians Forms 5498 reporting any contributions you have made to an IRA, a copies of the same Forms 5498 that the IRA custodians would have sent to you.