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Author: syeluru0 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Calculting Earnings/Losses - Roth IRA Withdrawal Date: 3/6/2001 4:25 PM
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On March 1, 2000 my roth IRA was worth
$5000(1998 contribution +1999 contribution + gains),
I made a contribution of $1800 to roth IRA on
that day for the year 2000. Then I discoverd that
I was ineligible to make ROTH contribution in
year 2000 and so I decided to request a
distribution of $1800 + earnings. Lets say if
I request the distribution on march 01,2001
and the IRA is worth $2500. The ROTH IRA trustee
needs to transfer $1800 plus allocable net income.

Calculating Net income using New Method

The adjusted opening balance is 6800 [5000+1800}
and adjusted closing balance is 2500
Thus the net income allocable to $1800
is -1138 [1800*[2500-6800]/6800]

My question is if Roth IRA Trustee transfers
$662. What happens to 1138. Can I write as
capital loss? How are capital losses treated
with old method ?

My Second question is How do I calculate
the Adjusted opening Balance
and Adjusted Closing Balance. Lets say I want
to remove the excess contribution of $1800 plus
earnings from my roth IRA before the April 15
tax filing dead line. To calculate the closing
balance Can I take the portfolio value as of
Dec 2000 or Jan 2001 or Feb 2001 or Mar 2001.

The reason why I ask this is no matter
when you calculate the closing balance there
will be fluctuation between the day when I sign the
form and the day when the form will reach the
trustee
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