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I think it would be $2000 or $3000 depending on dates. The first $1000 is considered in the Roth as of Jan 1st on the year it was contributed. So the 5 year clock it is free to withdraw 5 years later plus the gains. So a 1st contribution in 2020 is free as of Jan 2nd in 2025. 2nd year in 2026 etc. So it depends on when you started your first $1000 contribution.

Sorry, you are incorrectly applying the 2 different 5 year rules.

5 year rule #1 - For a withdrawal to be a "qualified distribution" the owner must have had a Roth IRA in place for at least 5 tax years, PLUS - be at least 59 1/2, disabled or the non-spouse beneficiary of an inherited Roth IRA that was inherited on or before 12/31/19.

If your distribution is not qualified, because you don't meet both required criteria, then you go to the ordering rules for distributions, which is where 5 year rule #2 is applied. That is the rule that conversions must have taken place at least 5 years prior in order to be withdrawn tax and penalty-free.

These rules are spelled out in IRS Pub 590-B https://www.irs.gov/pub/irs-pdf/p590b.pdf Please note: Pub 590-B is currently being updated with the new rules non-spouse beneficiaries who inherit IRAs on or after 1/1/20, due to the SECURE Act becoming law. That said, the distribution rules for everyone except those beneficiaries are still the same, so you can use a prior year publication.

AJ
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