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.

Distributions that do not meet the above criteria are considered non-qualified and may be subject to income tax and early distribution penalties.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Non-Qualified Distribution — 1) A distribution from a Roth IRA that occurs before the Roth IRA owner meets certain requirements (see definition for qualified distributions). 2) A distribution from an education savings account that exceeds the amount used for qualified… …   Investment dictionary

  • Qualified Production Activities Income — is a class of income which is entitled to favored tax treatment under Section 199 of the United States Internal Revenue Code. [26 U.S.C. 199.] History Former section 114 of the United States Internal Revenue Code excluded extraterritorial income… …   Wikipedia

  • Qualified domestic relations order — A Qualified domestic relations order or QDRO is a legal order subsequent to a divorce or legal separation that splits and changes ownership of a retirement plan to give the divorced spouse their share of the asset or pension plan. QDROs may grant …   Wikipedia

  • Qualified Annuity — An financial product that accepts and grows funds, and is funded with pre tax dollars. Qualified is a descriptor given by the Internal Revenue Service (IRS) to indicate that the qualified annuity may be eligible for tax deduction. When a… …   Investment dictionary

  • Qualified Trust — A tax advantaged fiduciary relationship between an employer and an employee in the form of a stock bonus, pension, or profit sharing plan in which the underlying beneficiary may use his or her life expectancy to determine required minimum… …   Investment dictionary

  • qualified total distribution — A payment representing an employee s interest in a qualified retirement plan. The payment must be prompted by retirement (or other separation from service), death, disability, or attainment of age 59 1/2. Payment can be in installments as long as …   Financial and business terms

  • Distribution — 1. When trading volume is higher than that of the previous day without any price appreciation. 2. The removal of assets from a retirement account. The assets are then paid to the retirement account owner or beneficiary. 3. A company s payment of… …   Investment dictionary

  • Qualified Domestic Relations Order - QDRO — A type of court order typically found in a divorce agreement that recognizes that the ex spouse is entitled to receive a predefined portion of the individual s retirement plan. In most cases, the qualified domestic relations order (QDRO) allots… …   Investment dictionary

  • Qualified Reservist — A member of the military reserve who is not actively serving but may be called to duty and who is eligible to make an early withdrawal from his/her individual retirement account (IRA) without incurring the usual early distribution penalty. Under… …   Investment dictionary

  • Qualified Terminable Interest Property Trust — ( Q TIP) A trust that allows a surviving spouse to receive income generated from the trust, while the actual distribution of the trust s assets is made to other beneficiaries such as the grantor s children. Bloomberg Financial Dictionary …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.