I have a traditional IRA and a Roth. Can I make an allowable distribution from my trad to my roth tax-free?
You may rollover your traditional IRA into a Roth IRA. Normally, contributions to a traditional IRA are made with pre-tax dollars; whereas, contributions to a Roth IRA are made with post tax dollars. Thus, when you rollover a traditional IRA into a Roth IRA, the amount of the rollover is going to be taxed in the year of the rollover. This is because you are converting the pre-tax dollars to post tax dollars. Unlike traditional IRAs, when you take distributions from the Roth IRA, the distributions are tax free. However, since it is a qualified rollover, there is not the additional early distribution penalty of 10%.
