Roth IRA withdrawals

Does anyone know the tax and penalty rules on withdrawing money from a Roth IRA? I believe that withdrawing contributions is tax free and does not carry a penalty for early withdrawal. However, what is the contributions are currently in mutual funds, rather than cash?

Re: Roth IRA withdrawals

There will be no tax or penalty on the portion of the withdrawal that is a return of your original contribution. There will be a tax on the earnings portion along with a 10% penalty if you are under 59 1/2.

For example, if your original contribution was $2,000 and it is now valued at $3,500, you will pay tax and penalty on $1,500 (Current distribution less original contribution).

If the account is invested in mutual funds, rather than cash, the mutual fund will have to be liquidated in order for you to take a distribution.