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If I have excess roth IRA contributions that have a net loss, should I withdraw the original contribution amount or that amount less the loss attributable to it?

I made a $2,500 contribution to a Roth IRA in 2018, but now need to withdraw that to avoid penalties since I learned I'm not eligible to contribute due to income thresholds. I know if there are earnings that those need to be withdrawn as well and would be taxable, but I have a loss, so I'm wondering if I need to withdraw my contribution and the loss (effectively making me withdraw less than I contributed). I'm not able to enter a negative number for the earnings.

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DDollar
Expert Alumni

If I have excess roth IRA contributions that have a net loss, should I withdraw the original contribution amount or that amount less the loss attributable to it?

You would calculate (or have your broker/dealer) calculate the loss attributable to the excess contribution and withdraw the original contribution less the loss.  The amount of your contribution "returned* is $2,500 and your adjusted amount *distributed* is $2,500 less the attributable loss.


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1 Reply
DDollar
Expert Alumni

If I have excess roth IRA contributions that have a net loss, should I withdraw the original contribution amount or that amount less the loss attributable to it?

You would calculate (or have your broker/dealer) calculate the loss attributable to the excess contribution and withdraw the original contribution less the loss.  The amount of your contribution "returned* is $2,500 and your adjusted amount *distributed* is $2,500 less the attributable loss.


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