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Thanks for taking the time to be so detailed and thorough in your responses. I have a couple more questions though:

"First, let's deal with 2001. You say that the automatic contributions are still going on. Will you be eligible for Roth contributions for 2001? You're going to want to deal with this as part of resolving everything."

1. I don't think I'll be eligible for Roth IRA contributions this year either. I'm guessing I should stop the automated contributions ASAP, correct? What should I do with the $300 ($150 each account) already contributed this year?

"You can recharacterize the year 2000 contributions and the earnings on them as traditional IRA contributions. You do this by notifying your custodian and filing Form 8606 to show the recharacterization."

2. If I choose to recharacterize the 2000 contributions and earnings as traditional IRA contributions, what happens to the 1999 Roth IRA contributions? Are they essentially sitting in an account to which I can't add any more to? Can I recharacterize the entire account (all three years' worth)?

3. If I recharacterize the 2000 contributions, should I file form 1040X to reclaim the penalty I paid? Is there a deadline for this recharacterization to take place?

4. What should I do about the 2001 contributions to date?

Thanks again!

- Ira Rosenheim
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