Suppose I make a non-deductible traditional IRA contribution and later take a distribution less than the amount of the contribution. Clearly, the distribution is not subject to taxes. I don't think the distribution is subject to the 10% penalty, either (someone please correct me if I'm wrong).
Now suppose I make a non-deductible traditional IRA contribution and immediately convert it to Roth (aka backdoor Roth). Now I take an early distribution less than my original contribution. Is it subject to the 10% penalty? I hope the answer is no, but I think it might be yes.
I know the situation is greatly complicated by existing balances.
Thanks, Bill