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Subject:  Re: Roth IRA and 72T Date:  1/25/2001  12:57 PM
Author:  TMFExRO Number:  44814 of 129380

I won't go into the intracies of rollover ROTH amounts; however, I think you all need to go back & read ยง72(t) --- there can be no 10% penalty when there is no tax & there is no tax when the distribution from a ROTH (or any other type of IRA for that matter) in not includible in gross income.

Actually, there can be. See IRC 408A(d)(3)(F) and Q&A 5 of reg 1.408A-6. I did confuse things by talking about the unity of the 5-year test, and I apologize for that.

If you do a conversion to Roth, take a nonqualified withdrawal from that conversion (applying the ordering rules) within 5 years, and don't meet one of the 72(t) exceptions, you owe the penalty even though there's no taxable income attributable to the withdrawal.

Phil Marti
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