Ordering Rules
The order in which Roth IRA assets are distributed. Assets are distributed from a Roth IRA in the following order:
1. IRA participant contributions
2. Taxable conversions
3. Non-taxable conversions
4. Earnings Investopedia Says:
This set of rules is used to determine the applicable tax treatment of a nonqualified Roth IRA distribution.
Under the aggregation and ordering rules, all of an individual's Roth IRAs are treated as a single account. Related Terms:
In-Service Withdrawal
Individual Retirement Account - IRA
IRA Adoption Agreement and Plan Document
IRA Conversion
Non-Qualified Distribution
Qualified Distribution
Recharacterization
Reconversion
Required Minimum Distribution
Roth IRA
Spousal IRA
Triggering Event |