I made my first contribution to an employer's "designated Roth" 401(k) account or "deemed Roth IRA" under a 401(a) plan on 1 Feb 2008.
Suppose on 2 Feb 2013, I roll over the Roth account into a regular (non-employer's) Roth IRA.
Which 5-year period do I use to determine the taxability of future distributions from the regular Roth IRA of the amount attributable to the rollover: (a) the period starting 1 Feb 2008; or (b) the period starting 2 Feb 2013?
I am not sure whether it is a 401(a) plan or a 401(k) plan. My records are incomplete. I am checking with the employer on that.
How is the 5-taxable-year period calculated when I roll over a distribution from a designated Roth account to a Roth IRA? When you roll over a distribution from a designated Roth account to a Roth IRA, the period that the rolled-over funds were in the designated Roth account does not count toward the 5-taxable-year period for determining qualified distributions from the Roth IRA. However, if you had contributed to any Roth IRA in a prior year, the 5-taxable-year period for determining qualified distributions from a Roth IRA is measured from the earlier contribution. So, if the earlier contribution was made more than 5 years ago and you are over 59 ½ a distribution of amounts attributable to a rollover contribution from a designated Roth account would be a qualified distribution from the Roth IRA.
What is the URL for that? I cannot find it with a Google search.
"Alan" wrote:
[....] [quoting the IRS Q&A:]
Thanks for that information.
So the 5-year period starts with the earliest "contribution" to any pre-existing regular (non-employer) Roth IRAs. Right?
But I'm curious: is that limited to the earliest __regular__ contribution per se, or can it be an earlier __conversion__ or __rollover__ contribution?
-----
In any case, if the rollover is the first Roth IRA contribution (there are no other Roth IRAs), the 5-year period starts on 2 Feb 2013 for my example. Right?
-----
That is for a rollover from a "designated Roth account" per se.
What about a rollover from a "deemed Roth IRA" under a 401(a) plan, for example?
A "deemed Roth IRA" is different from a "designated Roth account".
According to IRS Pub 590 page 54 regarding a "deemed Roth IRA":
"If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject __only_to_IRA_rules__. An employee's account can be treated as a traditional IRA or a Roth IRA."
And on page 62:
"If you roll over an amount from one Roth IRA to another Roth IRA, the
5-year period used to determine qualified distributions __does_not_change__. The 5-year period begins with the first taxable year for which the contribution was made to the __initial_Roth_IRA__."
So, does the 5-year period starts on 1 Feb 2008 for a rollover from a "deemed Roth IRA" under a 401(a) plan to a regular (non-employer's) Roth IRA, regardless of the 5-year ?
Suppose on 2 Feb 2013, I roll over the Roth account into a regular (non-employer's) Roth IRA.
Which 5-year period do I use to determine the taxability of future distributions from the regular Roth IRA of the amount attributable to the rollover: (a) the period starting 1 Feb 2008; or (b) the period starting 2 Feb 2013?
I am not sure whether it is a 401(a) plan or a 401(k) plan. My records are incomplete. I am checking with the employer on that. ===============
Does your response conflict with Alan's? I don't understand the phrase "the period that the rolled-over funds were in the designated Roth account does not count toward the 5-taxable-year period for determining qualified distributions from the Roth IRA".
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.