Tony and Donna started a Roth IRA four years ago and recently distributed $5,000 to purchase their first home. Assuming they are in the 20% tax bracket, what will their tax liability be for the distribution assuming the distribution comes entirely all from their original contributions?(Distributions are FIFO; assume all distributions are coming from their contribution)

No Tax Liability & No Penalty

$1,000 Tax Liability & $1,000 Penalty

$1,000 Tax Liability & No Penalty

No Tax Liability & $1,000 Penalty