Reply To: Excess Roth Contribution

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Yes, I see.
Another option not mentioned, assuming this excess Roth contribution is excess due to MAGI, is to recharacterize it to a TIRA if done by filing date plus extensions. But in this case it does not apply as they are past Oct 15, 2017.

This has got me thinking….. (yes, always dangerous)
Assuming the IRA custodian allowed it or somehow didn’t catch it, what would happen if some high AGI person (too high to contribute to a Roth) contributed $100,000 to their Roth, invested aggressively and then filed the 5329, paid the $6,000 penalty after the next year’s Oct 15 and just did this year after year, and then finally at some future year withdrew the original $100,000 excess, leaving tens if not hundreds of $Thousands in the Roth?

Just curious