Sorry but it is all taxable. There is no exception to the early withdrawal penalty when you take money out of a 401k to purchase a house. With a traditional IRA you can waive the early withdrawal penalty on $10,000 that you take out to purchase a house. That is not true for taking money from a 401k. You have to report the distribution as shown on your 1099R. The taxable amount will be shown on line 5b of your Form 1040.
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