Trading, Accounts & Prohibited ActsQuestion 243 of 398
A qualified distribution from a Roth IRA is generally tax-free if the account has been open at least five years AND the owner meets which condition?
a.Has held the account in a margin arrangement
b.Rolls the funds into a 401(k) within 60 days
c.Is at least age 59 1/2 (or meets another qualifying event)
d.Has never taken a prior contribution back out
Explanation
Roth IRAs are funded with after-tax dollars, so qualified distributions of earnings are tax-free when the five-year holding period is met and the owner is 59 1/2 or older (or death, disability, or a first-home purchase applies). Contributions can always be withdrawn tax-free.
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