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Roth IRA distribution adjusted for basis


ILLMAS

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I was wondering if someone might have experience with this situation before, TP recieved a 1099-R with Code J, according to her broker, she is only responsible for taxes on access of her principal contribution.  Back in 2007, she rolled over $25K and in 2016 she withdrew a total amount of $30K, she has had it more then 5-years, was not used for tuition, first time home buying, medical etc....  I am not sure if this is correct since I have not been able to find anything on it and that is why I am asking.

Thanks 

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Contributions are withdrawn first in a ROTH IRA. If she converted 25,000 from a Traditional IRA to a ROTH, and that's all the basis, then she owes tax on 5,000 of earnings.  If she was younger than 59 1/2 when she took the withdrawal, she also owes 10% penalty on the earnings. 

It may not be this straightforward. My clients always dink around and forget what they did with their money, what they contributed, what they withdrew, etc.  They are pretty sure it's all in my computer somewhere. 

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