It isn't clear whether the $1000 that you are referring to as "cost basis" is the purchase price of the stock or the amount that you contributed or converted to the Roth IRA. Stocks held within a Roth IRA do not have a capital cost basis; the amount that your Roth IRA paid to purchase the stock is irrelevant. What you do have is contribution basis and conversion basis in all of your Roth IRA accounts in aggregate and it's the contribution and conversion basis that determine whether or not your Roth IRA distribution will be taxable as Opus 17 describes. The taxable portion of any distribution from an IRA is taxable as ordinary income.
