I have a client who took out $20,448.73 out of their IRA, Code 1 is in box 7, and they made sure they had taxes withheld. I remember their was something passed that say if they were buying their 1st home they would be penalized, and I see when you make the 1099 worksheet out it has a code under box 7 for J that you could put in the dollars for the purchase but it had to be from a ROTH. How do I report this on their return? Should they have told the company they were withdrawing it to buy their first home? Thank you.
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TTB page 13-3
See the left column #9 on page 13-3. You make this adjustment on Form 5329 for the first $10,000. -
the 1st $10,000 does not get penalized
you need to fill out form 5329, and mark the box for distribution for 1st time home purchase.
call your software company and they can walk you through the specifics for your software.
JoshInNCComment
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Thank you I finally figured it out after I posted. Thanks again for everyone's response.Comment
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