In 1998 I converted my Traditional IRA to a Roth IRA. I did this so I could spread out the taxes over the next 4 years.

Now I want to withdraw approximatley the amount that I have not paid the taxes on yet for a first time home purchase. Though, I have not yet fulfilled the 5 year holding period for the ROTH.

Can I make this qualified withdraw? Or do I have to recharactorize to not be penalized. Or am I out of luck?

If you take money out in year 2000, which is the third year of the four year spread of conversion income, you will cause an acceleration of income to be reported in year 2000 from the original conversion. You cannot recharacterize a 1998 conversion at this time.

You can take the money for a first time home (limited) and avoid the 10% tax on early withdrawal but you cannot avoid income tax on any earnings withdrawn since the account has not been in existence for over five years.