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
4. Earnings
Investopedia Commentary
This set of rules is used to determine the applicable tax treatment of a non-qualified Roth IRA distribution.
Additionally, under the aggregation and ordering rules, all of an individual's Roth IRAs are treated as a single account.
Related Links
Tax Treatment Of Roth IRA Distributions
Roth Or Traditional IRA...Which Is The Better Choice?
See also: In-Service Withdrawal, IRA, IRA Adoption Agreement and Plan Document, IRA Conversion, Non-Qualified Distribution, Qualified Distribution, Recharacterization, Reconversion, Required Minimum Distribution, Roth IRA, Spousal IRA, Triggering Event