robbing from peter to pay paul

[Guest n00b_9]

Ok, I have a unique question (I think) and I haven't been able to find the answer online. Sorry if this has been brought up before but here goes.

If you contribute $10,000 to your ROTH IRA, and let's say your earnings on that amount were $4,000 (nice!). But before Dec 31st, you withdraw $5,000 so that you have met the maximum contribution limits ($5,000 per year). Are you then forced to also withdraw the earnings on the excess contribution and treat it as income? The irs.gov website makes it seem that way but I thought I was reading it wrong.

Basically what I want to do is contribute more than the max, earn $$$ on that amount, then reduce my contribution to the legal limit, while protecting my earnings in the ROTH IRA.

Let me know if this makes sense and if this is possible. It seems to me that it would be nice, but not possible.

Where the "robbing from peter to pay paul" comes in, is that I want to take a loan from my 401k to fund my ROTH IRA and then put the money back at the end of the year. The reason for this is because my 401k options at my company are getting me a 6% return per year if I'm lucky. I have my own investment method that is netting me 6% per MONTH on average and want to grow my money that way instead. It would be nice if it were tax free through the ROTH IRA. Thus my question. Thanks for any help!