I am 40 years old & had a total distribution of my one and only traditional IRA. I funded the IRA with nondeductible contributions & since they were greater than my distribution amount, I had a loss & am not subject to paying income tax on the distribution. The loss on my investment falls under Miscellaneous Deductions on Schedule A. So far, so good - I agree
My question is: TurboTax is not assessing me the early 10% withdrawal penalty on Line 59 on the 1040 - is this correct? Does it have something to do with the fact that I had a basis in the IRA? I have researched and wasn't able to find anything on point with my situation...I just assumed that I would be subject to the penalty...please advise if TurboTax is correct