Of course, there would be no chance of error in either method.../sarc
;-)
This whole discussion gets me to think that I may be in trouble for this years return, because I sold about $5000 in stock options in my IRA to be used for medical purposes only...That is what the manager of my investment account said he would note on the sale of that stock, and the subsequent paperwork he would file with the government...
I would still have to pay taxes on it though, but not a “penalty”, which I kinda believe is still a “tax punishment” because “how dare I benefit now with the money I have tucked away and not used till now for a legitimate need” in the tax law...
Penalty can only be avoided if you are entitled to medical deduction in excess of 10% of agi or you meet some other exception.
http://www.investopedia.com/articles/retirement/02/111202.asp