JAMES PATRICK

To escape all taxes and penalties the distibution can not be made prior to the 5 year time frame the Roth must be open before qualified withdrawals can be made. In this case you could withdraw your contributions with no taxes or penalties but the earnings would be subject to taxes and the 10% early withdrawal penalty.

The reason I am somewhat confused was the examples given in Pub 590 on page 44. The examples say amounts were converted in 1998 and withdrawn in 2003 and 2004. The 2004 withdrawal had no 10% penalty but the 2003 did.

I have read Roth rules and regs and would like confirmation on a few points: 1.) If you withdraw conversion money after it is in a Roth for 5 years and you are not 59 1/2 it seems to me that the 10% penalty still applies, is that so? (only deductible money was converted). 2.) Earnings on contributions or conversions would be subject to 10% until an exception was to apply, 59 1/2 etc.