Roth Conversion Indicating Code 2

[Christian]

A client took distribution from an existing IRA depositing the funds into a Roth IRA. In checking the Code 2 exempts her from the early withdrawal penalty of 10% correct ?

[jasdlm]

If she converted the entire amount, then no penalty.  I hope I'm understanding the question correctly.

[Christian]

She converted the entire account balance and will pay regular income tax as a distribution. Code 2 exempts her from incurring the 10% early distribution penalty evidently as she is well below 591/2 years of age.