Can my son avoid part of the penalty for cashing in ira as a first time home buyer if he used part of the money to pay mortgage after losing job?

dbpenny — Thu, 06 Jun 2019 09:59:31 GMT

The only amount that is available for the exception, is t...

Coleen3 — Thu, 06 Jun 2019 09:59:32 GMT

The only amount that is available for the exception, is that attributable to the First time home purchase.

First home.

Even if you are under age 591 2, you do not have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.

1. It must be used to pay qualified acquisition costs (defined next) before the close of the 120th day after the day you received it.

2. It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined below) who is any of the following. a. Yourself. b. Your spouse. c. Your or your spouse's child. d. Your or your spouse's grandchild. e. Your or your spouse's parent or other ancestor.

3. When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000. If both you and your spouse are firsttime homebuyers (defined later), each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax.

Qualified acquisition costs.

Qualified acquisition costs include the following items. Costs of buying, building, or rebuilding a home. Any usual or reasonable settlement, financing, or other closing costs.

Firsttime 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.

topic Can my son avoid part of the penalty for cashing in ira as a first time home buyer if he used part of the money to pay mortgage after losing job? in Retirement tax questions

Can my son avoid part of the penalty for cashing in ira as a first time home buyer if he used part of the money to pay mortgage after losing job?

The only amount that is available for the exception, is t...