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Subject:  Re-Contributing Date:  2/2/2001  10:32 AM
Author:  LTDEBT Number:  27632 of 88431

Here is my question....
I fully understand that the yearly limit for contributions to a Roth IRA max out at $2000. What happens if you put money into a Roth IRA, remove it, and then put it back in again.

Example: Say in March I put $2000 in my Roth, in May I remove $2000 for "personal reasons," and then I decided I want to put the money back in, so I contribute $2000 in October. Ultimately I still have $2000 in the account, but haven't I contributed $4000 for the year? I understand that I would get a 1099R stating I removed the $2000, thus crossing out $2000 on my 5498.

My understanding is that if the original $2000 was removed with earning (NIA), then I am allowed to put the money back into the IRA. What happens if earnings weren't taken out on the original distribution? Is that second $2000 an excess contribution? Where can I find this in IRS Regs (I have looked in 590 but haven't come up with anything).

Hopefully this isn't too confussing, and an answer is somewhere out there for me....
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