Roth IRA withdrawal

[JenMO]

client has had a roth IRA account since 2008. 2014 she takes a withdrawal from the Roth, bank puts "J" in code box, no know exception. I don't think that is right. Can't she take withdrawals of contributions after 5 years even if she is not 591/2? If so, how is that handled on the return. 5329 doesn't have a code for that.

[Gene V]

client has had a roth IRA account since 2008. 2014 she takes a withdrawal from the Roth, bank puts "J" in code box, no know exception. I don't think that is right. Can't she take withdrawals of contributions after 5 years even if she is not 591/2? If so, how is that handled on the return. 5329 doesn't have a code for that.

You fill out Form 8606 Part 3

[Roland Slugg]

Can't she take withdrawals of contributions after 5 years even if she is not 591/2?

Well, she can take them, but part of the distributions may be taxable. The 59½ age applies to Roth IRAs just like it does to traditional IRAs. However, principal (i.e. basis) is deemed to be distributed first, so there will be taxable income only when the accumulated total of all such distributions exceeds that basis. (Code §408A(d)(4))