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    #1

    Roth Distribution

    Client withdrew Roth IRA. 1099-R indicates Code T Exception. However, my software includes the withdrawal in taxable income and a 10% penalty. I understand the penalty, but shouldn't the Roth IRA withdrawal be tax free? Thanks for any comments.
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    #2
    Originally posted by Unregistered
    Client withdrew Roth IRA. 1099-R indicates Code T Exception. However, my software includes the withdrawal in taxable income and a 10% penalty. I understand the penalty, but shouldn't the Roth IRA withdrawal be tax free? Thanks for any comments.
    Figure out his basis and deduct it from box 2
    Last edited by Brian EA; 03-19-2006, 02:08 PM.
    Everybody should pay his income tax with a smile. I tried it, but they wanted cash

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      #3
      Basis

      The first distributions from a Roth are basis. You need to figure out the basis and that will tell you what, if any, of this distribution is taxable.
      I would put a favorite quote in here, but it would get me banned from the board.

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