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BladeXrunners writes (in part):

If you guess wrong, you can "recharacterize" it into a traditional IRA, obviously the contribution will be non-deductible if your AGI is that high. "Recharacterize" means to treat the contribution as though it was original made to the traditional IRA.

Or you can withdraw the contribution and all its earning. If you do this by the due date, including the extension, then it treated as though it had not be contributed. Unfortunately, I haven't seen any IRS guideline for how to calculate "its earning", so good luck.

I reply:

A couple of comments. First, no matter how high the original poster's AGI is, if he/she is not a participant in a qualified retirement plan at work, a traditional IRA contribution will be deductible. Second, Vanguard, for one, will calculate the earnings for you; in fact, in my case (a mutual fund), they insisted. There doesn't seem to be any need to segregate the 2000 contribution. --Bob
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