Is it from an IRA? It's right. You do owe tax on it. But you just avoid the 10% Early Withdrawal Penalty for buying a house. After you enter the 1099R it will ask if you have an exception to the penalty. Just keep going. It has to be from a IRA. You can't get that exception from a 401K plan.
The payer will generally use distribution code 1 if the participant has not reached age 59½, even if the distribution is made for certain expenses that may qualify for an exception to the additional 10% tax on early withdrawals such as medical expenses, health insurance premiums, qualified higher education expenses, or a first-time home purchase.
Enter Form 1099-R in TurboTax exactly as it appears. Then, as VolvoGirl mentioned above, answer all of the follow-up questions in TurboTax that are asked in order to determine whether you meet an exception to the additional 10% tax. The distribution itself is taxable income as shown on your form.
See this TurboTax help article for more information about exceptions to the early distribution "penalty" additional tax.