Does the entire amount withdrawn have to go to the downpayment or can part of it be used to do things like paint and buy new appliances on the purchased home?

I'm am also trying to determine if deposits or closing costs are the only qualified expenses. We used IRA money to build a retaining call and install a fence and I am trying to determine if those expenses are also valid homebuyer costs

The exception to the penalty is for amounts used to "acquire" the first home.  Jbthomp07, the expenses you mentions sound like improvements, not acquisition costs.  If you could live in the home without these improvements, I don't think that they could be considered to be acquisition costs.

Section 72(t)(8)(C):

(C) Qualified acquisition costs

How do I document and/or submit these qualified acquisition costs to TurboTax or the IRS? I suppose I should keep various relevant paperwork, but I want to make sure I do it correctly the first time. I've definitely been screwed over in the past by assuming it'll all work out and then getting a nasty surprise next April!

Keep a copy of your settlement statement with your tax return in case the IRS questions the distribution in the future.

To indicate that the withdrawal from your IRA is for a first-time home purchase, and not subject to the 10% penalty, please follow these steps:

1. On the 1099-R entry screen, make sure you check the IRA/SIMPLE/SEP box below line 7.
2. Several screens after the 1099-R entry screen, you will see Did [you] use your IRA to pay for any of these expenses? 
3. Enter the amount in the box First home purchase.  [See screenshot below.]

@zyphlar

Can I withdraw from Rollover IRA for the first time home purchase?

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@phani_k27 wrote:

Can I withdraw from Rollover IRA for the first time home purchase?

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Once you have money in an IRA, the first $10,000 you withdraw for a first time home purchase is exempt from the 10% penalty, although you still pay regular income tax.  It doesn't matter if the money was rolled over from a different kind of account.  

Excellent. Thankyou !