Restrictions on IRA transfers to Roth’s

A client over 60 transfers an existing IRA to a Roth, paying the taxes. Is the account restricted for 5 years before any withdrawals can be made?



Not at all. However, if this is his first Roth and he pulls out the entire conversion amount, additional distributions composed of earnings would be taxable (not not penalized) until the 5 year holding period is reached.

Even if he was not yet 59.5, distributions of conversions are not restricted, but the early withdrawal penalty would generally apply.



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