If you are referring to the penalty exception for a first-home purchase, the exception in $10,000 is a lifetime limit for each individual's IRAs. If the $5,000 was from one individual's IRAs and the $7,000 was from the other person's IRAs, the first individual can claim the exception on the $5,000 and the other individual can claim the exception on the $7,000, provided that the first individual has not previously used the exception on more than $5,000 in the past and the other individual has not used the exception on more than $3,000 in the past. On the other hand, if the $5,000 and $7,000 came from the same individual's IRAs, the exception can be claimed on only the first $10,000 of the $12,000 distributed (provided that this individual has not use any of the $10,000 limit before).
A first-time homebuyer is defined as follows:
First-time homebuyer. Generally, you are a first-time homebuyer if you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse must also meet this no-ownership requirement.
Date of acquisition. The date of acquisition is the date that:
- You enter into a binding contract to buy the main home for which the distribution is being used, or
- The building or rebuilding of the main home for which the distribution is being used begins.
https://www.irs.gov/publications/p590b#en_US_2016_publink1000230922
