@qbteachmtThank you so much for contributing. I do not agree with what you quoted earlier: "Exceptions to the 5-Year Rule: Under certain conditions, you may withdraw earnings without meeting the five-year rule, regardless of your age." My position is that there is no exception for five-year account open requirement, the earnings used for first home purchase will still subject to tax if the account has not been opened for 5 years. I do not think I have issues with what you said in last post, but words can be interpreted differently, so I would like to post answers to the examples I posted earlier. If we have the same answers, then it is safe to say we are on the same page, or please tell me what you do not have different answers. Thanks.

(1) a 30-year old taxpayer made the following distribution and conversions in 2020:

- 2020: distribution 33000
- 2015: taxable conversion 5000
- 2016: taxable conversion 5000
- 2017: taxable conversion 5000
- 2018: taxable conversion 5000
- earning: 13000
- qualified first time home purchase: 10000

Amount subject to tax is 3000, subject to penalty is 18000.

(2) taxpayer's age is 30:

- 2020: distribution 33000
- 2016: direct contribution 5000
- 2017: direct contribution 5000
- 2018: direct contribution 5000
- 2019: direct contribution 5000
- earning: 13000
- qualified first time home purchase: 10000

Amount subject to tax is 13000, subject to penalty is 23000.