Need advice for early Roth IRA withdraw options

Forum|Forum|1 year ago
January 9, 2025
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I'm going through a financial hardship and would like to withdraw early from a Roth IRA.

My father originally set it up through Vanguard in the 1990s and ownership has transferred to me.

I believe I can withdraw early without taxes and fees (because it is roth) up to the the contribution amount, but not any of the gains (the gains would be normally taxed and 10% penalized). Please correct me if I'm wrong.

The total amount in the Roth is ~$77K.

With the help of a Vanguard rep, we were able to locate transactions for funding the account for $5,200 between 2008-2011, but we could not locate any other transactions. The rep said transaction history should go back to 1998. Going off of memory (which is rough after over 27 years), I believe the total contribution was somewhere around $20k, but I only have proof of transactions for the $5,200. I don't have the vanguard records history from the 1990s and my father unfortunately passed away.

How can I determine the basis of the fund (or the total contributions of the fund)? Is there a calculation the IRS would use, or am I stuck paying the entire withdraw amount with taxes and penalty since I only have transaction history of $5,200?

Any assistance is much appreciated.

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Best answer by Opus 17

@Philly1228 wrote:

Ownership transferred to me years before his death (I'm guessing after I was 18 back in 2007). I'm 35 currently. My father passed away two years ago.

As long as this is not an inherited IRA, which has different rules.

As far as your own IRA is concerned, unfortunately the law says the IRS doesn't have to give you any tax break you can't prove (like tax-free withdrawals of Roth IRA contributions). If you can only prove $5200, that's more or less what you are stuck with. The IRS will have received a form 5498 in your name from the broker for any year that you made a contribution, but those records only go back at most 10 years.

You could make a withdrawal based on your "guess", but you would be at risk if audited.

Opus 17

Employee

Please clarify: how was ownership "transferred" to you? Is this your IRA, or did you inherit it? If inherited, what date did your father pass? How old are you now?

Philly1228Author

Ownership transferred to me years before his death (I'm guessing after I was 18 back in 2007). I'm 35 currently. My father passed away two years ago.

Opus 17Answer

Employee

@Philly1228 wrote:

Ownership transferred to me years before his death (I'm guessing after I was 18 back in 2007). I'm 35 currently. My father passed away two years ago.

As long as this is not an inherited IRA, which has different rules.

You could make a withdrawal based on your "guess", but you would be at risk if audited.