Retirement tax questions

And just to clarify, I have to pay early-distribution penalty on this?! So in total, if you make an excess contribution and are under 59, you are guaranteed to either pay 10% penalty on gains, plus your individual tax rate on income, or no penalty on losses, but cannot deduct losses from income. Seems like these are punitive measures - designed to punish both those who experienced gains and losses. In my case, I experienced 30% gains on my excess contribution; it might make more sense to keep the excess contribution in my account.