"edconn678" wrote:

- quote -

Kinda sorta. The operative terms are contributions, conversions, and
earnings. When you take "nonqualified" distributions from a Roth IRA, they
come out in that specified order, with different potential tax and penalty
consequences for each. When you withdraw contributions they are free of tax
and penalty.

See IRS Publication 590.

- quote -

See Form 8606, Part III.

--
Phil Marti
Clarksburg, MD

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It is my understanding that one can withdraw the principal from a Roth IRA
at any time without tax or penalty. That tax and penalties only apply
when one withdraws the interest/dividends/capital gains that have accrued
in the Roth.

So my first question is, is my understanding correct?

My second question is, assuming one withdraws some principal, how does one
convey that information to the IRS so they don't try to collect
tax/penalties or think you are trying to evade? I've looked over form
5329 but don't see anything that seems like what I'm looking for.

Thanks!



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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >