I read pub 590 and have read previous threads on withdrawing excess contributions to Roth IRAs, but I still have a question. I don't understand how to figure how much exactly I need to withdraw. Here is a hypothetical situation (sadly, similar to the real one I am interested in):I make a contribution of $2000 to my Roth for tax year 2000 in Jan of 2000. I have an unexpectedly good year, and exceed the income limit, rendering all of this contribution an excess contribution. I want to avoid the penalty by withdrawing it before April 16, 2001.When I invested the $2000, it bought me 100 shares of a mutual fund at $20/share. There were, say, $1 per share in cap gains distributions & dividends reinvested at $20/share, say. But the share price has fallen to $10/share now.So, the shares I bought in Jan 2000 are now worth $1000 and the shares I got via reinvestment of the distributions are worth $50.So, on net I lost $950 on the investment.What do I withdraw? $1050 (the $2000 plus $100 in earnings plus -$1000 in earnings on the original shares plus -$50 on the shares bought via reinvestment?)$2100 (the $2000 plus $100 in earnings?)Something else?And do I owe taxes/penalties? How about do I get to use the capital loss to offset capital gains in my normal investments?Pub 590 is not too useful on this topic as far as I can tell. It just says to withdraw the $2000 plus any earnings.
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