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I have a couple small IRAs (about $4500 total) that I want to close. I plan to make a Roth contribution also. For simplicity I was going to just take as a taxable distribution and separately make a contribution to the Roth for the full allowable amount.

Check your age, too. If you're under 59 1/2, and you just "take as a taxable distribution," you'll likely be subject to a 10% early withdrawal penalty on top of the ordinary income tax on the withdrawal.

If you convert (not rollover) those IRAs to a Roth IRA, though, you'll only owe the income tax and not the penalty.

Eric Hines
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