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TMFTaxes writes: [[An otherwise eligible distribution won't be qualified if made within the 5-tax-year period beginning with the first tax year for which a contribution was made to the individual's Roth IRA. For payouts properly allocable to rollovers from a non-Roth IRA (see below), the 5-year period begins with the tax year in which the rollover contribution was made.]]

[[1. It is made within the five-tax year period beginning with the first tax year for which the individual made a contribution to a Roth IRA; OR
2. It is made within the five-tax year period beginning with the first tax year for which a qualified rollover contribution from a regular IRA was made.]]

Okay both of the above state that rollovers from t.IRAs into r.IRAs restart the 5 year clock ticking. What are the specifics of "merging" two r.IRA accounts ("combining" or "joining" (whatever it's called))? (see example2)


- create a 1997-t.IRA.
- create a 1998-r.IRA.
- rollover 1997-t.IRA into 1998-r.IRA (by signing the waver)
* allowed to use 1998-r.IRA in 2003.

This is what prime13 asked about and what I plan to do, because the r.IRA was first contributed to *and* rolled into the same year, the two 5 year timers start ticking at the same time. I don't see how this could affect our abilities to remove money in the future?

I do understand that in 2000 if I roll my 401k plan into a t.IRA then right into that 1998-r.IRA would the nasty effect of reseting the 5 year timer from rollovers. (So I will roll that into a sperate r.IRA if I don't transfer it to the next job).


- create a 1997-t.IRA.
- create a 1998-r.IRA.
- in 1998 rollover the 1997-t.IRA into a new rollover-1998-r.IRA.
* allowed to use both accounts in 2003.

- in the year 2000 merge 1998-r.IRA and rollover-1998-r.IRA into merged-2000-r.IRA.

Now the fun questions... both of the accounts that were merged *are* r.IRA accounts and *both* _would_ have been available in 2003. The rules listed above only apply to t.IRA into r.IRA rollovers...

does it:

a) reset the 5 year rollover timer on the new account?
b) use the largest timer of the two merged accounts?
c) use the timer on the accout that was merged *into*?

choice c is a nice happy loophole... =)
choice b is what I expect to be logical and reasonable (not an IRS sort of thing to do).
choice a well... sucks. many people will have 20 different r.IRA accounts in the distant furture.

both option b and c are nice in that eventually everyone can merge all r.IRAs into a single account to minimize tracking/trading hassles...

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