Does a withdrawal of 000 for 1st home purchase count against Roth IRA basis?
Does a withdrawal of 000 for 1st home purchase count against Roth IRA basis? I need to know to see how much I can take out after this ,000 qualified withdrawal (assuming having been in the Roth IRA for more than 5 years and I'm younger than 59 1/2 years old).
In other words, let's say I have ,000 in contributions to Roth IRA and then my account grew by ,000 (Roth IRA stock investments) so I now have ,000. I need some money and need to tap into my Roth IRA so I want to know how much I still can take out tax and penalty free.
Is my basis still ,000 after 000 for house or do I only have 000 left for basis? I'm thinking I should still have 000 left for basis since the 000 house was qualified and a special case. Please let me know.
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From Schwab
With a Roth, withdrawals of contributions are always tax-free because
you've already paid income taxes on that money. So are withdrawals of
earnings of up to ,000 under the homebuyer exemption, assuming
you've had the Roth for five-plus years. But if you withdraw more than
,000 in earnings, that money will be subject to both ordinary
income taxes and the 10 percent penalty.
TL;DR: No, it doesn't count against the Roth IRA basis.
You can find out by looking at Form 8606 Part III, which is the part for distributions from Roth IRA.
Line 19 is the sum of nonqualified distributions, plus qualified first-time homebuyer distributions. You would put 000 here. Then you would subtract 000 on line 20 (qualified first-time homebuyer expenses) to get [CO] on line 21. You enter your basis on line 22, but since line 21 was 0, you stop. You do not subtract anything from your basis. If you take out more than 000, then it's only the part over 000 that is subtracted from your basis.
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