topic Hi, I may need to do an early withdrawal of my Roth IRA Conversion. How can I determine my principal investment if my brokerage firm doesn’t have the record of it? in Retirement tax questions

Hi, I may need to do an early withdrawal of my Roth IRA Conversion. How can I determine my principal investment if my brokerage firm doesn’t have the record of it?

mahletx — Mon, 14 Sep 2020 16:16:08 GMT

The firm doesn’t hold records longer than 10 years. I would like to know what my principal investment is so that I don’t count it when I am penalized for the gains.

Re: Hi, I may need to do an early withdrawal of my Roth IRA Conversion. How can I determine my principal investment if my brokerage firm doesn’t have the record of it?

VolvoGirl — Mon, 14 Sep 2020 16:19:23 GMT

You don't report gains or losses or sales in an IRA. You pay tax on distributions. But distributions from a ROTH IRA are tax free. You should have paid any tax when you converted from the IRA to the ROTH IRA.

Re: Hi, I may need to do an early withdrawal of my Roth IRA Conversion. How can I determine my principal investment if my brokerage firm doesn’t have the record of it?

dmertz — Mon, 14 Sep 2020 16:49:10 GMT

If the Roth conversion occurred in 2015 or earlier, the amount that you converted is now treated as equivalent to a regular Roth IRA contribution with the converted amount coming out before any amounts subject to tax or penalty.

If the Roth conversion 2016 or later, any regular contributions you have made to Roth IRAs come out first, tax and penalty free, and only after all of your regular Roth IRA contributions have been distributed to you begin to dip into the amount converted to Roth. Any amounts taxable at conversion would be tax-free but would be subject to a recapture of the 10% early-distribution penalty. Once those have been distributed, amounts that were not taxable at conversion (from a conversion of after-tax money from a qualified retirement plan like a 401(k) or attributable to basis in nondeductible traditional IRA contributions) come out tax- and penalty-free. Last come out any earnings that occurred in your Roth IRAs subject to both income tax and 10% early-distribution penalty.