Roth IRA early distribution

[llf]

Client got an early distribution on Roth IRA, is under age 59-1/2. Has NOT received any prior distributions. As I understand it, I need to enter TP contributions on line 22 Part III of 8606 (which will be the amount distributed) so taxable amount will be -0-. Will TP be subject to 10% penalty since distributions were on TPs contributions? If not subject to penalty, do I report in Part 1 of 5329 and exception 9. I have read the form instructions and just need some clarification from preparer that has experienced this before. This is my first one. All responses are GREATLY appreciated.

[Bill Tubbs]

5-years?

Client got an early distribution on Roth IRA, is under age 59-1/2. Has NOT received any prior distributions. As I understand it, I need to enter TP contributions on line 22 Part III of 8606 (which will be the amount distributed) so taxable amount will be -0-. Will TP be subject to 10% penalty since distributions were on TPs contributions? If not subject to penalty, do I report in Part 1 of 5329 and exception 9. I have read the form instructions and just need some clarification from preparer that has experienced this before. This is my first one. All responses are GREATLY appreciated.

My understanding is that if client had started contributions to the Roth 5 or more years ago then there will be no penalty -- as long as the amount pulled out is less than or equal to his total contributions. If the amount pulled out is more than his contributions, then the excess would be taxable and/or subject to penalty.

I'm not up on the rules if he had started contributions to the Roth less than 5 years ago.

Bill

[llf]

Longer than 5 years

Client is checking with investment advisor to get exact $ of contributions. TP has been contributing longer than 5 years. I get a bit confused when I read the 5329 instructions page 2 for "Exceptions for Roth IRA Distributions" on what goes where. Does this mean if line 25c of 8606 goes on line 20 of 5329 AND on line 22 of 5329? THANKS AGAIN.