Q. I reached 70 1/2 yrs in 2014. I must start withdrawing my traditional TSP funds by April 1. I want to transfer the full amount (less than the RMDs for 2014 and 2015, plus 10% tax) to an existing ROTH IRA. A call to the ThriftLine informed me “there may be tax implications”. What might these tax implications be?
Q. I have read conflicting information concerning VCP to ROTH conversion and the five-year rule. Based on this information, there may be a difference between the funds converted and the interest income generated in the ROTH account. Can you explain how the five-year rule applies in each case? A. The five-year waiting period for the converted funds and the interest they produce will begin on Jan. 1 of the year of the conversion. Check page 71 of IRS Publication 590 for an explanation of the rules. You should consult a qualified tax adviser regarding the rules and how they apply…
Q. After reviewing the TSP rules, it appears that I can’t transfer (or roll over) my Roth TSP monies into a qualified Roth IRA without a proportional share coming out of my traditional monies. Is this correct? I wanted to leave my traditional monies in my TSP and separate the Roth monies and roll them over into a Roth IRA.