No, this isn't deductible, but it may qualify for an exception to the early distribution penalty if you had an Individual Retirement Arrangement (IRA). If you took money out of an IRA early (before age 59½) and are a qualified first-time homebuyer, you may be exempt from the 10% additional tax on up to $10,000 used to buy your home. After you enter your 1099-R information in TurboTax and continue through the interview, you'll be able to indicate the amount of your early IRA distribution you spent on the home. (Click the screenshot below for reference.)
Note: This exception to the early distribution penalty does not apply to qualified plans, such as 401(k) plans. Please see IRS
Retirement Topics - Exceptions to Tax on Early Distributions for reference.
To enter a 1099-R in TurboTax Online:
- Open (continue) your return in TurboTax. (If your return isn't open, you'll need to sign in and click Take me to my return.)
- Click My Account (top right of your screen).
- Click Tools.
- Click Topic Search.
- In the search bar, type 1099-r.
- In the results box, highlight 1099-r and click Go.
- Follow the onscreen instructions.
