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Subject:  Roth IRA Corrective Distribution Date:  2/18/1999  10:30 AM
Author:  brucemn Number:  10471 of 127745

If I have a "corrective distribution" from a Roth IRA (where you make a $2000 contribution and then discover that you are not eligible under the MAGI requirements), is the net income in that corrective distribution subject to the 10% penalty of section 72(t)? I can't find any information on this in the new IRA Regs. on Roth IRAs. I'm willing to take a chance and make the Roth contribution if the only downside (if I turn out not to be eligible) is that I owe regular (or capital gains) taxes on the net income in the corrective distribution, but if I get hit with a 10% penalty....

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