Basis reduced too?

[joanmcq]

Client took $7500 out of her Roth for a first home. On the 8606, first time homebuyer is listed as an exclusion before basis and all of her distribution qualifies.  Do I still reduce her basis by the full amount?  In other words, can I elect to treat some of it as distribution of earnings?

[Pacun]

If that money was in the Roth for more than 5 years, no explanation needed and nothing is taxable.

[joanmcq]

Still need to do the 8606. And the earnings are subject to penalty.