@dmertz thank you in advance as I ask for clarification.
The proper correction is to make a regular distribution of exactly $1,500
^ In other words, I should make a withdrawal from my Roth IRA of exactly $1,500, is that correct? Should I also withdraw the $3,200 in addition to the $1,500 (to avoid the potential penalty on the $3,200)? I’m reading “distribution” as “withdrawal”, but please let me know if that’s wrong.
Also, if you file your 2022 tax return or request a filing extension by April 18, 2023, the deadline to obtain a return of the $3,200 contribution made for 2022 is October 15, 2023. The distribution to accomplish a return of this $3,200 contribution will be adjusted for gain or loss on the $3,200 and MinhT1 described, with any gains being taxable on your 2022 tax return. However, I believe that SECURE 2.0 eliminated that early-distribution penalty on gains distributed with a return of contribution, so in 2022 TurboTax you might have to claim an Other reason exception to the the early-distribution penalty on the gains if it appears.
^ With about one month left, would you suggest an extension or have you seen financial institutions both execute a withdrawal and also provide the exact amount of gain or loss? For addl’ context, my taxes are just about ready to go - this is the only thing preventing me from moving forward.
Thanks again for timely responses.
