Roth IRA Distribution

[Questionguy101]

Facts:
Roth IRA distribution in 2007 = $5,500
$3,000 of which is taxpayer's own contribution. $2,500 of which is capital gains.
All contribution were made more than 5 years ago.
Taxpayer is 58 years old.

Taxpayer withdrew the full amount in 2007.

What is the tax consequence?

Thank you for the help.

[DonPriebe]

Thinking out loud ...

Facts:
Roth IRA distribution in 2007 = $5,500
$3,000 of which is taxpayer's own contribution. $2,500 of which is capital gains.
All contribution were made more than 5 years ago. Taxpayer is 58 years old.

Taxpayer withdrew the full amount in 2007.

What is the tax consequence?

Non-qualified distribution since t/p is not 59-1/2 years old.

His $3,000 contribution comes out tax and penalty free.
The $2,500 earnings are subject to ordinary income tax and the 10% penalty.

Report on Form 8606 Part III, flows to 1040 lines 15a, 15b and 60.