Since you're starting with a ready-made garment, the first step is to find an appropriate one. Find a turtleneck sweater with clearly visible stitches -- anything too furry or fuzzy may prove difficult to dismantle. You'll also want a sweater that was sewn together by hand rather than on a sewing machine -- if you see a zigzag seam, choose a different sweater for your project. For our demonstration we're using a sweater with a gauge of approximately three stitches per inch in stockinette stitch. The sweater need not be knit in stockinette, but the gauge needs to be roughly appropriate for the contrasting yarn chosen. If you wish to use a sweater with a smaller or larger gauge for your project, that's fine. Take your chosen garment to your local yarn store and ask for help in making a good choice of contrasting yarn if you're unsure. Choosing a yarn that you really love is the name of the game here. Since you'll likely need only a single skein of yarn, and you've spent only about five dollars on the sweater, go ahead and splurge on the yarn you'll use for the collar and hem. We've chosen a nice, basic yarn so that you can see what's going on, but you can knit these added-on bands in the fuzziest, sparkliest thing you desire.
Look carefully at the sweater and try to understand how it was put together. Was the collar knit as one piece with the body? Was it picked up from bound-off neck stitches? No matter how it was put together, you want to work backward as you take it apart.
How to Remove a Turtleneck
Examine the inside of the turtleneck and look for seams. Your turtleneck may have one or two seams, or none at all. If there are seams, try to open them up with your fingers, then carefully cut the yarn used to sew the seams. Open the seam down to the beginning of the shoulder.
If you can spot the tail end of the yarn at the top of the neck, you may be able to pull it loose with a crochet hook or your fingers. If not, just remove the bound-off edge with your scissors and start pulling the yarn until it starts to unravel. Don't worry too much about making a mess or saving the yarn: pull out what you can, and resort to your scissors if you need to. It's better to be a bit patient and try to follow a stuck strand of yarn than to pull harder and create a knot.
If your collar was knit as one piece from stitches picked up from bound-off edges of the sweater front and back, when to stop unraveling is obvious. Keep going until the collar is completely removed. You won't have to worry about losing stitches.
With sweaters that have the front body and neck knit as one piece and the back body and neck knit as a second piece, you'll need to make a judgment call. How much shoulder to leave has to be balanced against creating a hole you'll still be able to get your head through after you've remade your neckline. There won't ever be a finished, bound-off edge. When you've brought the neckline down as far as you wish, take a circular knitting needle and carefully pick up the stitches as you pull out the last row. If you've dropped any stitches, pick them up with a crochet hook just as you would in a garment you were knitting. Be careful to pick up stitches the right way so that knit stitches look like knit stitches and purl stitches look like purl stitches.
Occasionally you'll come across a turtleneck that was knit from the top down and then sewn onto the body. If you can't get the collar to ravel from the top, carefully cut it off above the neck, ideally by removing the yarn used to seam the two pieces together.