topic Re: Roth Basis in Retirement tax questions

Roth Basis

marciamneal — Thu, 02 Jan 2025 00:05:41 GMT

I'm 54, I want to pay my house off with my Roth basis. My Roth account has changed companies a couple times now because of mergers. I've had this Roth since my 20's and I just have no idea my actual basis is.

What can I do to make sure I don't take out too much.

Thank you!!

Re: Roth Basis

Opus 17 — Thu, 02 Jan 2025 15:43:33 GMT

Unfortunately, if you are audited, the burden of proof is on you to show that you are entitled to any tax break, including tax-free withdrawal of Roth contributions. You can get transcripts of your account from the IRS, but they only go back 3 to 10 years, in most cases. You are looking for any form 5498 that was filed with the IRS by the Roth administrator to report contributions.

https://www.irs.gov/individuals/get-transcript

You can also contact all your past Roth custodians. They should have records even if you moved your funds out of their account.

Re: Roth Basis

marciamneal — Sat, 04 Jan 2025 13:29:49 GMT

Thank you!! That was helpful!!!

Re: Roth Basis

fanfare — Sun, 05 Jan 2025 05:25:43 GMT

Once your Roth IRA has existed for more than five years, there is no issue with basis.

Any withdrawal is tax-free.

@marciamneal

Re: Roth Basis

Opus 17 — Sun, 05 Jan 2025 06:26:55 GMT

@fanfare wrote:

Once your Roth IRA has existed for more than five years, there is no issue with basis.

Any withdrawal is tax-free.

@marciamneal

Incorrect. If the taxpayer is under age 59-1/2, withdrawal of earnings is subject to income tax plus a 10% penalty, and withdrawal of conversion amounts is subject to a 10% penalty if it is less than 5 years since the date of the conversion (each conversion has a separate 5 year clock that is different from the general 5 year clock).