Traditional IRA.   Just non-deductible not excess (Poor wording on my part )     

I guess I created this awful circular scenario in my head thinking the non-deductible would need to be withdrawn. It's just some basis to track.  No need to withdraw.  The 1099R gives him $370 non-deductible contribution now.    Oh well.

The original withdrawal was done so taxpayer's contribution could become spouse's contribution which was deductible.    

Any way around the 10% penalty on the $978 earnings withdrawal ?