[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.408A-1]

[Page 506]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.408A-1  Roth IRAs in general.

    This section sets forth the following questions and answers that 
discuss the background and general features of Roth IRAs:
    Q-1. What is a Roth IRA?
    A-1. (a) A Roth IRA is a new type of individual retirement plan that 
individuals can use, beginning in 1998. Roth IRAs are described in 
section 408A, which was added by the Taxpayer Relief Act of 1997 (TRA 
97), Public Law 105-34 (111 Stat. 788).
    (b) Roth IRAs are treated like traditional IRAs except where the 
Internal Revenue Code specifies different treatment. For example, 
aggregate contributions (other than by a conversion or other rollover) 
to all an individual's Roth IRAs are not permitted to exceed $2,000 for 
a taxable year. Further, income earned on funds held in a Roth IRA is 
generally not taxable. Similarly, the rules of section 408(e), such as 
the loss of exemption of the account where the owner engages in a 
prohibited transaction, apply to Roth IRAs in the same manner as to 
traditional IRAs.
    Q-2. What are the significant differences between traditional IRAs 
and Roth IRAs?
    A-2. There are several significant differences between traditional 
IRAs and Roth IRAs under the Internal Revenue Code. For example, 
eligibility to contribute to a Roth IRA is subject to special modified 
AGI (adjusted gross income) limits; contributions to a Roth IRA are 
never deductible; qualified distributions from a Roth IRA are not 
includible in gross income; the required minimum distribution rules 
under section 408(a)(6) and (b)(3) (which generally incorporate the 
provisions of section 401(a)(9)) do not apply to a Roth IRA during the 
lifetime of the owner; and contributions to a Roth IRA can be made after 
the owner has attained age 70\1/2\.

[T.D. 8816, 64 FR 5601, Feb. 4, 1999]