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Last year I place $2,000 into a Roth IRA. This money was NOT
converted from a traditional IRA. Now I want to withdraw
$1,000 of that money.

I've read here on the Motley Fool Board that I should be able to
withdraw up to my original $2,000 penalty and tax-free.
However, Waterhouse Securities (where my Roth IRA money is
held) does not agree. Who's right and what can I do?

You will have to do some close reading of the rules to make sure but I think you are ok. Get IRS publications 590 and look Are Distributions From My RothIRA Taxable?
4.htm (add this to the link as it is not included)

If the withdrawl was done in 1998 I think you would be a winner (Probably in 1999 if done before 4/15)from reading one of the examples.

There is a 5 year rule and the broker is probably thinkg everything for the next five years is taxable. As you point out you are taking out your Roth contribution. I do not think the 5 year rule applies to this.

Without doing any research my recall was that Roth contributions can be taken out at any time but that the five year rule may have some exceptions. I would print out Pub 590, read it and then email the good parts to the broker and make the withdrawl.
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