- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
After entering the code-J Form 1099-R, indicating that you used the money for a first-home purchase and entering the amount that you used for a first-home purchase, be sure to click the Continue button on the page that lists the Forms 1099-R that you have entered and indicate whether or not you had a Roth IRA before 2018. If your first contribution to a Roth IRA was made in 2018 or later, you do not qualify to have the amount present on Form 8606 line 20 to exclude it from income.
Note that you only need to apply the first-time homebuyer's exception to amounts distributed that would otherwise be subject to the early-distribution penalty. If your distribution was entirely from contribution basis and therefore not subject to tax or penalty anyway, you should not indicate that it was used for a first home. TurboTax will unnecessarily put it on Form 8606 line 20 and it will be unnecessarily applied to your $10,000 lifetime limit for using the first-time homebuyer's exception.