United Communications Partners Inc (UCPA)

[CashCollections]

Has to be a qualified distribution...only can take out principle added to fund not profits...have to be 59.5 or have money going towards a house...it’s a great idea if you don’t need to access your profits for awhile or are close to or older than 59.5


Return of Contributions
Because you have already paid taxes on the money you contribute to a Roth IRA, you can withdraw an amount equal to your contributions at any time for any reason without creating a taxable event. For example, you might contribute $5,000 to your Roth IRA and use the money to buy stock. If the market value of the stock increased to $6,000 you could sell the stock and withdraw $5,000. The IRS would consider the $5,000 withdrawal a nontaxable return of your contributions, so you would not be taxed on this capital gain.

Qualified Withdrawals
"Qualified withdrawal" refers only to the investment gains in your Roth IRA. You must have had the account for at least five years and meet one of the other Internal Revenue Service qualifications before your earnings become qualified. The most common additional qualification is reaching age 59 1/2. However, you can also take qualified withdrawals if you are using the money to buy a first home or if you are disabled. Qualified withdrawals are free from federal income taxes, regardless of how the growth was earned.

Nonqualified Distributions
If you withdraw Roth IRA earnings before they become qualified, they will be taxed as ordinary income and may be subject to an additional 10 percent penalty, regardless of how the earnings were produced. For example, you might contribute $5,000 to your Roth IRA and use that money to buy stock. If the market value of that stock increased to $6,000 and you sold your stock, you could make an early withdrawal of $6,000 from your IRA. The IRS would consider $5,000 of this withdrawal to be a nontaxable return of contributions. The remaining $1,000 would be taxed as ordinary income, even though it was earned as a capital gain. You may have to pay an additional 10 percent tax penalty on the $1,000.