webmaker wrote:

- quote -

As long as your previous contributions to the Roth EXCEED
the amount of the withdrawal, it does not matter what your
reasons are for distributing the money. Your contributions
can be withdrawn AT ANY TIME, for any reason, with no tax or
penalty being due. Hence, there is no need to use any of the
$10,000 lifetime exclusion for first-time homebuyer.

All distributions, even if tax and penalty-free, are
reported on form 8606, Part III.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"webmaker" <lisarupe[at]yahoo.com> wrote:

- quote -

Yes because the IRS doesn't know it was qualified. If it
was qualified you don't need to run the penalty exclusion
calc. If it was not qualified then you need to run the
calc.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

The manager of the Roth account reports distributions to the
IRS on accounts less than five years old.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

lisarupe[at]yahoo.com (webmaker) posted:

- quote -

[I assume you meant "took $3000" in your opening sentence.]

If it has been at least 5 years from the beginning of the
year in which you first set up and contributed to your Roth
IRA, your distribution is considered "qualified" and is not
subject to either tax or a penalty.

If you meet the requirements, Pub 590 shows a worksheet for
confirming that you owe no penalty -- and specifies that you
"do not have to file Form 5329 to report an early
distribution or figure additional tax or claim an
exception."

A "qualified" distribution should _not_ be included in your
gross income; however, I would advise you to include in your
tax files a statement of the details of your distribution
and the justification for considering it "qualified" --
perhaps using the IRS worksheet.

Bill

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I took $300 from my Roth in 2005 to buy a house in March
2005. I believe I qualify for a first time home buyer
because I had not owned a house for 3 years, is that
correct? If so, then do I need to even file a Form 8606
because the $3000 has no penalty and is not taxed?

Thanks,
Lisa

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >