This is a followup to a question I asked back in June. My Roth IRA
contains regular contributions as well as conversions from both
deductible and non-deductible IRA contributions. I have not tracked
the basis over the years, but I believe I have all the requisite
paperwork (specifically forms 5498 and 8606). Is there a simple >procedure/algorithm for computing my basis today? It seems relatively >straightforward, but I just want to make sure I'm avoiding all the
pitfalls.
On Tuesday, December 1, 2015 at 3:00:04 PM UTC-5, Rich Carreiro wrote:apply to non-deductible traditional IRA contributions, as well as deductible ones (including 401k rollovers)? Consider the following scenario, which I do every year:
It's very easy. Assuming you've never taken a Roth distribution, your
Roth IRA basis is the sum of the full amounts of every regular Roth
contribution and conversion contribution you've ever made.
I should be more specific about what I'm trying to figure out. I want to know how much money I could withdraw from my Roth IRA tax- and penalty-free (right now). I know I have to worry about the 5-year rule for conversions. But does the 5-year rule
It's very easy. Assuming you've never taken a Roth distribution, your
Roth IRA basis is the sum of the full amounts of every regular Roth contribution and conversion contribution you've ever made.
I should be more specific about what I'm trying to figure out. I want to know how much money I could withdraw from my Roth IRA tax- and penalty-free (right now). I know I have to worry about the 5-year rule for conversions. But does the 5-year ruleapply to non-deductible traditional IRA contributions, as well as deductible ones (including 401k rollovers)?
Consider the following scenario, which I do every year:
My traditional IRA balance is $0. I contribute $5,500 to my traditional IRA. I immediately convert that traditional IRA to a Roth IRA. Could I then withdraw that money tax- and penalty-free?
It seems like I should be able to, but I can't really find any documentation one way or the other. With the elimination of the income limit for Roth conversion, it seems like this would be a more and more common occurrence.
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