DEFINITION of 'Qualified Distribution'
Distributions made from a Roth IRA that are tax and penalty free. In order to be a qualified distribution, the following two requirements must be met:
1) It must occur at least five years after the Roth IRA owner established and funded his/her first Roth IRA
2) At least one of the following requirements must be met:
a) The Roth IRA holder must be at least age 59.5 when the distribution occurs.
b) Distributed assets limited to $10,000 are used towards the purchase or rebuilding of a first
home for the Roth IRA holder or a qualified family member.
c) The distribution occurs after the Roth IRA holder becomes disabled.
d) The assets are distributed to the beneficiary of the Roth IRA holder after his/her death.
INVESTOPEDIA EXPLAINS 'Qualified Distribution'
Distributions that do not meet the above criteria are considered non-qualified and may be subject to income tax and early distribution penalties.
1) A distribution from a Roth IRA that occurs before the Roth ...
The treatment of a contribution as being made to another type ...
A method used by individuals to minimize the tax burden of converting ...
The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
1. A tangible or intangible barrier or occurrence that, once ...
An individual retirement plan that bears many similarities to ...