Roth IRA Proceeds

[Guest Stiggy]

Good day all, here are the specifics to my question:

1) 1998--used the 4 year conversion method to the ROTH IRA. Paid all appropriate taxes(over the 4 year period).

2) Roth IRA has been reduced due to recent economic conditions.

My question is if I need to, can I take all of my ROTH money out without any penalty or tax considerations?(value is less than when I started the account).

I have added new Roth money to my IRA's in parallel with the conversion.

I realize that my money is after tax money and normally the investment income would only be taxed? But, since i had a loss... I assume I could touch all of the money if it becomes necessary(assumption is not penalized for losses as I already paid taxes over the four years on essentially money that is no longer there).

Hope this makes sense. Appreciate your time.

[WDIK]

This link may be of some assistance.

[Appleby]

I paraphrase, just to make sure were are of mutual understanding.

In addition to the 1998 conversion, you make regular IRA contributions to the Roth IRA. Your current Roth IRA balance is less than the mount you converted plus the amount you contributed.

If this is true, then your are right- all distributions from your Roth IRA will be tax and penalty-free.

[Guest Stiggy]

Thx for your responses. I appreciate the input!

[Guest Fishchick]

To add to what Appleby posted, if you distribute 100% of all your Roth IRA assets, and your basis (what you converted and contributed) is greater than the distribution, you can claim a deduction for the loss (as a miscellaneous itemized deduction, subject to the 2% of AGI limit). Hope that helps.