Conversion, distribution & taxes

[Guest fiduciary1]

I converted a traditional IRA to a Roth IRA in 1998, paid federal income taxes (over 4 years, 98-01). Since I'm under 59 and 1/2, what income tax (if any) will I face if I withdraw funds in 2005?

[Appleby]

It depends. If the amount you withdraw is no more than the amount you converted, then your withdrawal will be tax and penalty-free. Any withdrawn amount in excess of the amount you converted will be subject to income tax and the 10-percent additional tax ( early distribution penalty)…the penaly is waived if you meet an exception... this is assuming that the conversion in 1998 is the only Roth IRA contribution/conversion you completed to date. If not, that may change the response.