Qualified Distribution
Distributions made from a Roth IRA that are tax and penalty free. In order to be a qualified distribution, the following two requirements must be met:
1) It must occur at least five years after the Roth IRA owner established and funded his/her first Roth IRA
2) At least one of the following requirements must be met:
a) The Roth IRA holder must be at least age 59.5 when the distribution occurs.
b) Distributed assets limited to $10,000 are used towards the purchase or rebuilding of a first
home for the Roth IRA holder or a qualified family member.
c) The distribution occurs after the Roth IRA holder becomes disabled.
d) The assets are distributed to the beneficiary of the Roth IRA holder after his/her death. Investopedia Says:
Distributions that do not meet the above criteria are considered non-qualified and may be subject to income tax and early distribution penalties. Related Terms:
In-Service Withdrawal
Individual Retirement Account - IRA
IRA Adoption Agreement and Plan Document
IRA Conversion
Non-Qualified Distribution
Ordering Rules
Recharacterization
Reconversion
Required Minimum Distribution
Roth IRA
Spousal IRA
Triggering Event |