Guest gonug Posted January 12, 2003 Posted January 12, 2003 I am an individual over 591/2 years. My Roth IRA has been in effect over 5 years. Can I withdraw earned dividends without causing any tax problems? What if the Roth has not been in effect for five years?
JAMES PATRICK Posted January 13, 2003 Posted January 13, 2003 If Roth open 5 years and you are 59 1/2 any and all money can now be taken tax and penalty free. If not open 5 years and you are 59 1/2 than any earnings that you withdraw are subject to taxes but no penalty.
Don Levit Posted January 13, 2003 Posted January 13, 2003 A Roth IRA involves non-deductible contributions. All withdrawals, for tax purposes, are first, return of contributions. So, if you have contributed $2,000 a year for three years, your "cost basis" is $6,000. No income tax is assessed on the first $6,000 of withdrawals. The 5 year rule applies only to earnings, not contributions. I will be happy to provide the IRS code section, if you wish.
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