Roth Distribution

Collapse
X
Collapse
 
  • Page of 1
  • Time
  • Show
Clear All
new posts
Previous template Next
  • Unregistered
    #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.
    Tags: None
    • Brian EA
      Senior Member
      • Dec 2005
      • 786
      #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

        Comment

        • Matt Sova
          Senior Member
          • Jun 2005
          • 645
          #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.

            Comment

            Previous template Next

            Disclaimer

            Collapse

            This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

            Working...