@taxesarecomplicated - please be sure to read the linked thread. What isn't clear from your post is that the $10,000 has to be taken from EACH IRA. You can't take $20,000 from ONE IRA and avoid the 10% penalty for being a first time buyer even thought you are filing joint. Each spouse would need to withdraw $10,000 from their respective IRAs to avoid the 10% on $20,000
