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Financial Planning / Tax Strategies


Subject:  true? Date:  7/5/2012  9:35 AM
Author:  culcha Number:  116396 of 129252

This is a question about Roth IRA qualified distributions. Suppose that I am over 59.5, I have earned income and make an allowable contribution to my Roth. Moreover, the Roth has been in existence for over 5 years. Now, I can have make qualified distributions from Roth.

OK. Now suppose that I make one of these contributions to my Roth. I use those funds to buy 100 shares of XYZ. But within a matter of months (or maybe 2 or 3 years), I sell the 100 shares of XYZ and have the proceeds sent to me. Wouldn't that count as a qualified distribution?

If so, it seems to me that as long as I am over the age (and, frankly, I don't expect to get any younger) and also have earned income, I can contribute it to my more-than-5-year-old Roth and then take a non-taxable distribution.

Seems right -- but also seems to work in my favor (which makes me suspicious ...)

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