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"Yes, once you are into the earnings you may use the education expense exception for an early withdrawal. BUT (and there's always one of those) -- The withdrawal of any earnings will be taxed at ordinary income tax rates. They will not be tax-free unless you are older than age 59 1/2 and the conversion money has been in that account for at least five tax-years at that time. Education expenses do not qualify for an early tax-free withdrawal in a Roth IRA, just a penalty-free withdrawal."

As I understand, after 5 years, the principle can be withdrawn without penalty. Can it be withdrawn without paying income tax on it?

If I have $10,000 of principle and $5,000 of gains after 5 years and I decide to withdraw $3,000 can I declare the $3,000 is princple or must I take $2,000 principle and $1,000 gains?


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