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Greetings, TTE, and welcome. You asked:

Early this year I made my contribution for year 2000 to my Roth IRA for myself and my wife ($2000 each). Now, due to an unexpected bonus from work, my AGI will exceed $160,000 which means I am not eligible for a Roth IRA in 2000. How do I undo my contributions as well as the net loss/gain on the stocks that the $$ were invested in? Do I have to convert this to a regular IRA or can I just pull the money back out? Note: the 2000 contributions were put into an existing account that already contains 1998 and 1999 contributions so I can't convert the entire account...these earlier contributions need to stay as a Roth IRA.

You can recharacterize the contributions as being made to a nondeductible traditional IRA provided you do so no later than October 15, 2001. Alternatively, you may withdraw all of money provided you do that by April 16, 2001. If you do the latter, you must also take all earnings, declare them as income, and pay a 10% early withdrawal penalty on that income if you are younger than age 59 1/2.

You will find details on how to do either in IRS Publication 590 (Individual Retirement Arrangements)available for download at Also, your IRA provider can walk you through the necessary steps to accomplish either action.

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