I have a Roth IRA containing a mix of regular contributions as well as Roth conversion contributions. As I understand, I can withdraw my regular contributions tax/penalty free. However, how I do know how much I can withdraw when the account has a mix of regular contributions and Roth Conversion contributions, each of which may have a confusing mix of gains or losses?
No specific reason, I was just curious how one would facilitate this since Roth IRAs can contain both regular after-tax contributions and Roth conversions. Let's say For example:
In 2018 you do regular contributions of $1000 to a Roth IRA and invest in a bunch of securities
In 2019 you do a $1000 Roth Conversion and invest it in a bunch of securities
In 2020 you sell all the securities and invest in different ones several times, blurring the lines further.
Now it's 2021 and the account value is $2500, implying the overall value of the account has a gain of $500, but it's impossible to differentiate what proportion of this gain/loss is from the roth conversion money or the regular contribution money. If you want to withdraw the $1000 of regular contributions which should be tax-free/penalty-free, there is no way of knowing or proving that the regular contributions did not have a loss and therefore you are actually withdrawing from some of he roth conversion.
