Taking money from an IRA to purchase a home out of state for our retirement.

[mikesim711nj]

I lived and own a home in NJ.  In July I took money out of my IRA as the down payment of a house in FL.  Unfortunately I was laid off at the end of July and we had to move more quickly then expected.  I moved in the middle of November to FL.  I still have the house in NJ because I could not sell it before the end of 2021.  Can't I say I re-invested the money from the IRA into a new home investment?

[FangxiaL]

If you are thinking about the 10% additional tax relief, your FL home doesn't qualify for First-Time Homebuyer exemption.

[mikesim711nj]

I am not a first time home buyer.  

[fanfare]

Did you close on the house in FL within 120 days of taking that distribution for a down payment.?

If so you qualify for home purchase  exemption.

but if you are over 59 1/2 it makes no difference anyway.

You are considered a first time homeowner if you lived in the NJ home long enough.

Oops.

[PattiF]

No, you do not qualify for the exception to the 10% penalty.

The exact wording from the IRS is: 

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.

[dmertz]

You do not qualify for the first-time homebuyers exception to an early-distribution penalty, but if you were over age 59½ at the time of the distribution (code 7 on the Form 1099-R), you are not subject to this penalty anyway.

The fact that you used the money to purchase a home has no bearing on the taxability of the IRA distribution.