Tax consequences of liquidating a roth ira

In 2018, John is 55 years old, and the balance in John's Roth IRA at that time is represented as follows: John wants to know the tax consequences should he distribute assets from his Roth IRA in 2018.

For example, distributions from traditional IRAs are generally treated as ordinary income and may be subject to income tax as well as an additional early-distribution penalty if the withdrawal occurs while the IRA owner is under the age of 59½.The five-year period begins with the first day of the year for which the first contribution was made.For example, if the first Roth IRA contribution was made for 2017, the five-year period begins Jan 1, 2017.We will use examples of various 2018 distribution amounts from John's Roth IRA to show their tax treatment.If John takes a distribution of ,000, the first ,000 comes from his regular Roth IRA contributions and is, therefore, tax- and penalty-free.

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