What about the distribution of a roth on the principal contribution: ex. 2 years ago I converted $5000 to a roth. I am sure it has earned on the capital. Will there be a penalty if I take a $1000 distribution from the principal amount? I am only 56 and the account is 2.5 years old. The money is to pay off the mortgage of rental property.

Your conversion is less than 5 years old and you are under 591/2. YOur withdrawal will not be taxable but it will be subject to the 10% premature distribution penalty.