DEFINITION of 'Ordering Rules'
The order in which Roth IRA assets are distributed. Assets are distributed from a Roth IRA in the following order:
1. IRA participant contributions
2. Taxable conversions
3. Non-taxable conversions
INVESTOPEDIA EXPLAINS 'Ordering Rules'
This set of rules is used to determine the applicable tax treatment of a nonqualified Roth IRA distribution.
Under the aggregation and ordering rules, all of an individual's Roth IRAs are treated as a single account.
A withdrawal made from a qualified plan account before the holder ...
An investing tool used by individuals to earn and earmark funds ...
A contract between the owner of an individual retirement account ...
A reportable movement of assets from a Traditional, SEP or SIMPLE ...
Distributions made from a Roth IRA that are tax and penalty free. ...
1) A distribution from a Roth IRA that occurs before the Roth ...