Qualified Distribution

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Qualified Distribution

A tax-exempt payment made to an annuitant from a Roth IRA. In order to be qualified, a distribution must occur at least five years after the Roth IRA was established and the annuitant must be at least 59.5 years old (unless there are extenuating circumstances such as a disability). A distribution is qualified because the contributions to the IRA are not deducted from the annuitant's taxable income.
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Note that qualified distributions from Roth IRAs don't have to be added in for this calculation.
Other notable education-related tax credits and deductions include: -- Deductions for Computers and Other Expenses: For tax years 2009 and 2010, the cost of Internet access and technology, such as a laptop or desktop computer, are considered qualified distributions from a section 529 (college savings) plan.
3) As a consequence, qualified distributions received from a Roth IRA are not subject to income tax.
Permitting qualified distributions if the individual's oldest Roth account is at least five years old and the reason for distribution is death, disability, or the participant is age 59 1/2 or older.
The benefits of the Archer MSA, and subsequently the HSA, are that contributions to the account are tax-deductible, earnings on the account accumulate tax-deferred, and qualified distributions are tax-free.
The Economic Growth and Tax Relief Reconciliation Act of 2001, which covers the tax treatment of 529 plans, expires on December 31, 2010, after which date qualified distributions would be taxable at the federal tax rate of the beneficiary unless Congress amends the law.
Since Roth IRA contributions are not tax deductible, qualified distributions from a Roth IRA will be tax-free.
The holding period starts on January 1, 1998 so that the taxpayer's one and only five-taxable year period will be met on January 1, 2003 for life for purposes of making future qualified distributions from contributed and converted Roth IRA funds.
Qualified distributions from the account are not included in income.
Under section 4942 of the Code, private foundations must make a minimum level of charitable contributions; where a foundation makes qualified distributions in excess of the prescribed minimum level, the excess can be carried over for five years.
4 in 10 investors do not know that the accounts offer tax-free accumulation and tax-free qualified distributions

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