Question:
I would like to ask a personal question about withdrawing funds from my traditional IRA account. How can I use part of it for a down payment when buying a new home as a first-time home buyer, without paying much in taxes on the withdrawn amount?
I appreciate your help. I am 70+ years old and still working. I recently purchased Mr. Slott’s books, but they don’t explain what to do to be exempted from taxes if you withdraw an amount of a traditional IRA account. Thanks a lot for your prompt reply and outstanding support to seniors like me.
Best regards and God bless,
Frank
Answer:
There is no exemption from taxes on retirement plan distributions. There are some exceptions to the 10% early distribution penalty, and “first-time homebuyer” is one of those exceptions, as long as the funds come out of an IRA account. However, since you are over age 59½, the 10% early distribution penalty would never apply to any distribution that you take.
Bottom line, in your case you could take whatever funds you wanted out of your IRA to use for your home purchase with no restrictions, but funds you take out will be subject to income tax.
Question: 
I turn 70½ this year. I know the total amount in my IRA. I also have a basis of about $42,000 for my IRA.
I need to figure out how much money should be distributed this year — preferably as soon as possible. Obviously, I need to know this before I make distributions since I do not need or want to take any more distirbutions than the minimum and also do not want to incur any penalty for under-distributing.
Some of my RMD will be rolled over directly to qualifying charities. I assume that the new tax reform (redistribution) law does not take away the ability make such distirbutions up to $100,000 and have them reduce the taxable RMD. (This seems like a godsend when the deductability of charitable contributions has been undermined by the new law with its higher standard deduction and it limits on SALT deductions).
Does the financial institution holding the IRA  provide a form specifying the RMD for the acocunt? If so, when? How do I calculate the effect of the basis on the RMD?
Please respond.
James
Answer:
The qualified charitable distribution (QCD) provision was not changed by the Tax Cuts and Jobs Act. You will have the ability to transfer funds directly from your IRA to a qualifying charity as soon as you turn 70½. Any distribution to charity prior to age 70½ will not qualify as a QCD.
Your IRA custodian will send you a letter in January advising you that you must take a required minimum distribution (RMD) this year. They will either tell you what they have calculated it to be or offer to calculate it for you.
When it comes to your RMD and the nondeductible contributions, keep in mind that nondeductible contributions do not affect how your RMD is calculated. It is included in the calculation. However, nondeductible contributions do affect how the RMD is taxed. Form 8606 will track the basis in your IRA. It must be filed with your income tax return in any year in which you make an after-tax contribution and in any subsequent year in which you take a distribution. There is a calculation done on the form that will determine how much of your distribution is taxable.
https://www.irahelp.com/slottreport/senior-first-time-home-buyer-and-qcds-today%E2%80%99s-qa-mailbag