As a Canadian / US resident, I've researched what to do with my IRA before returning to Canada and becoming US non-resident on this forum.
One option mentioned is to convert some of your IRA to a Roth-IRA first, then become NR of US and go from there.
However, if I look at the rules when creating a Roth-IRA, it states that I must have owned the Roth-IRA for 5 years before withdrawing money, otherwise it won't be non-taxable.
My question is that if I set up a Roth-IRA today and transfer some amount like $30K into it from my IRA, and then next year become a US NR, is that okay as long as I don't withdraw money from it for at least 5 years? Or does the act of becoming a US NR stop that 5 year clock somehow?
Convert part of IRA to Roth-IRA before returning to Canada
Moderator: Mark T Serbinski CA CPA
Re: Convert part of IRA to Roth-IRA before returning to Canada
It is best of course if this was an older Roth, HOWEVER, any CONTRIBUTIONS can be removed tax-free anytime, it's the growth that might be taxable if taken too soon.
But you are not looking to remove money, you are looking to fund a Roth, so no need to worry about timing. You will be keeping the Roth for years (otherwise why go through this?). the clock keeps running.
But you are not looking to remove money, you are looking to fund a Roth, so no need to worry about timing. You will be keeping the Roth for years (otherwise why go through this?). the clock keeps running.
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