| Distributed Assets |
Qualified Distributions |
Nonqualified Distributions |
Comment |
| Regular participant contributions |
Tax free and
penalty free |
Tax free and
penalty free |
Income tax and early-distribution penalty are never applied to distributed assets for which no deduction was allowed when the assets were contributed to the IRA. |
| Taxable conversion |
Tax free and
penalty free
|
Tax free but
penalty may apply
|
These are already taxed when converted. Penalty is waived if any one of the exceptions apply. |
| Nontaxable conversion |
Tax free and
penalty free
|
Tax free and
penalty free |
Income tax and penalty is never applied to distributed assets for which no deduction was allowed when the assets were initially contributed to the IRA. |
| Earnings |
Tax free and
penalty free |
Taxes apply and penalty may apply |
Penalty is waived if any one of the exceptions apply. |
I stand corrected.....
