Can you explain to me or give me an example of a non qualified distribuiton

A non-qualified distribution from a Roth IRA occurs when you withdraw funds that do not meet the criteria for a qualified distribution. Here's an example to help illustrate the concept:

Suppose you have a Roth IRA with $10,000 in contributions and $5,000 in earnings. If you withdraw $15,000 from your Roth IRA, the withdrawal would consist of the following:

1. Contributions: $10,000
2. Earnings: $5,000

If the withdrawal is a qualified distribution, the $5,000 in earnings would be tax-free and penalty-free, and you would only pay taxes on the $10,000 in contributions.
However, if the withdrawal is a non-qualified distribution, you would have to pay taxes on the entire $15,000 distribution amount, including both the contributions and the earnings. Additionally, you may also have to pay a 10% early withdrawal penalty unless one of the exceptions applies.

In summary, a non-qualified distribution from a Roth IRA is a withdrawal that does not meet the criteria for a qualified distribution and is subject to taxes and potentially a penalty.