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Hi, all:

My DW and I just got done with our tax man and got hit with the news that we had contributed too much to our respective Roth accounts (hers with Ameritrade adn mine with Scottrade) for the year 2004. Evidently, our MAGI was such that we could only contribute $450 each, as opposed to the maximum $3,000 we had contributed to each of our accounts.

I had bought wholeheartedly into the idea that the maximum Roth contributions should be made to the Roth accounts as early in the year as possible, only to find out from our tax man that one should normally contribute only after doing the taxes unless one is entirely certain that he/she would so qualify. Oh, and learn.

However, this mess brings us to the point of having to withdraw the excess contributions ($2,550 from each of our accounts). I scanned some of the recent posts but was unable to find any that dealt with the issue, so I am asking for any help in digging ourselves out of this hole.

Our questions include, but are not limited to, the following:

1. What exactly is the procedure for doing so? Is it dependent upon the brokerage where the account is located?

2. If there was net gain/loss in the accounts, some of it from the excess funds that should not have been there, is such a gain taxable or a loss deductible? If so, how exactly does one report or claim the gain/loss?

Any and all thoughts and advice are welcomed and would be greatly appreciated. Thanks in advance.

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