![]() qualified first time home purchase: 10000: exception.earning: 13000 : tax: yes, penalty: yes (not qualified distribution).2019: direct contribution 5000: tax: no, penalty: no (is contribution, not conversion).2018: direct contribution 5000: tax: no, penalty: no (is contribution, not conversion).2017: direct contribution 5000: tax: no, penalty: no (is contribution, not conversion).2016: direct contribution 5000: tax: no, penalty: no (is contribution, not conversion).In all the examples, the taxpayer is less than 59.5 years old. First home: did not buy a home within 2 years, up to 10,000 lifetime limit.Each rollover is accounted for separately. Clock starts from January 1 of the year to which you allocate the contribution. Five year rule: Account opened at least 5 years.– age >= 59.5 OR disabled OR inherited OR first home up to 10,000. Contribution can be withdrawn any time without tax and penalty regardless age and how long the account has been opened.Ĭonversion more than 5 years is not subject to penalty.For qualified distributions, both contribution and earning are free from tax and penalty.
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