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Last-in first-out rule. If you made more than one regular contribution for the year, your last contribution is consid- ered to be the one that is returned to you first. Earnings Includible in Income You must include in income any earnings on the contribu- tions you withdraw. Include the earnings in income for the year in which you made the contributions, not the year in which you withdraw them. Generally, except for any part of a withdrawal that is a return of nondeductible contributions (basis), any withdrawal of your contributions after the due date (or extended due date) of your return will be treated as a taxable distribution. Excess contributions can also be recovered tax free as discussed under What Acts Result in Penalties or Additional Taxes, later. Early Distributions Tax The 10% additional tax on distributions made before you reach age 591/2 doesn’t apply to these tax-free withdraw- als of your contributions. However, the distribution of CAUTION ! interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 591/2 rule, it will be subject to this tax. See Early Distributions under What Acts Result in Penalties or Addi- tional Taxes? in Pub. 590-B. Excess Contributions Tax If any part of these contributions is an excess contribution for 2017, it is subject to a 6% excise tax. You won’t have to pay the 6% tax if any 2017 excess contribution was withdrawn by April 17, 2018 (plus extensions), and if any 2018 excess contribution is withdrawn by April 15, 2019 (plus extensions). See Excess Contributions under What Acts Result in Penalties or Additional Taxes, later. You may be able to treat a contribution made to one type of IRA as having been made to a differ- ent type of IRA. This is called recharacterizing the contribution. See Recharacterizations, earlier, for more in- formation. TIP Determining the Amount of Net Income Due to an IRA Contribution and Total Amount to be Withdrawn From the IRA Worksheet 1-4. Keep for Your Records 1. Enter the amount of your IRA contribution for 2019 to be returned to you . . . . . . . . . . . . . . . . . 1.

2. Enter the fair market value of the IRA immediately prior to the removal of the contribution, plus the amount of any distributions, transfers, and recharacterizations made while the contribution was in the IRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Enter the fair market value of the IRA immediately before the contribution was made, plus the amount of such contribution and any other contributions, transfers, and recharacterizations made while the contribution was in the IRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Divide line 4 by line 3. Enter the result as a decimal (rounded to at least three places) . . . . . . 5.

6. Multiply line 1 by line 5. This is the net income attributable to the contribution to be returned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7. Add lines 1 and 6. This is the amount of the IRA contribution plus the net income attributable to it to be returned to you . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

Example—Illustrated Worksheet 1-4. Keep for Your Records 1. Enter the amount of your IRA contribution for 2019 to be returned to you . . . . . . . . . . . . . . . . . 1. 400 2. Enter the fair market value of the IRA immediately prior to the removal of the contribution, plus the amount of any distributions, transfers, and recharacterizations made while the contribution was in the IRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 7,600 3. Enter the fair market value of the IRA immediately before the contribution was made, plus the amount of such contribution and any other contributions, transfers, and recharacterizations made while the contribution was in the IRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. 6,400 4. Subtract line 3 from line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. 1,200 5. Divide line 4 by line 3. Enter the result as a decimal (rounded to at least three places) . . . . . . 5. 0.1875 6. Multiply line 1 by line 5. This is the net income attributable to the contribution to be returned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. 75 7. Add lines 1 and 6. This is the amount of the IRA contribution plus the net income attributable to it to be returned to you . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 475 Page 32 Chapter 1 Traditional IRAs