Roth distribution for first time (married) home buyers question.

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Subject Author Date Roth distribution for first time (married) home buyers question. Marspinball 10-15-2009  Re: Roth distribution for first time (married) hom... Mark Bole 10-15-2009
Posted by Marspinball on October 15, 2009, 9:43 am Please log in for more thread options I've been researching PUB 590 (page 55) and the IRS code (72(t)(2)(F)) and seem to find some contradictions. My wife and I are purchasing our first home together. I currently own a home and she has never had an ownership interest in a home. My question is can my wife use 10K from her Roth since she is a first time home buyer where I exclusively have ownership in the home we currently live in ?? And if the answer is yes can you please site the code. Thanks!!!! Martin. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Mark Bole on October 15, 2009, 10:57 am Please log in for more thread options Marspinball wrote: > I've been researching PUB 590 (page 55) and the IRS code (72(t)(2)(F)) > and seem to find some contradictions. My wife and I are purchasing our > first home together. I currently own a home and she has never had an > ownership interest in a home. > > My question is can my wife use 10K from her Roth since she is a first > time home buyer where I exclusively have ownership in the home we > currently live in ?? Well, she can't qualify for the exception to the 10% early distribution penalty since you (spouse) don't meet the definition of a first-time homebuyer, Pub 590 is pretty clear on that: "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." However, you can *always* withdraw *contributions* (not conversions) to a Roth at any time for any reason with no tax or penalty, so if she contributed at least $10K over the years, no problem. If the $10K includes *earnings* or conversions, and she's under age 59.5, then more rules apply, and most likely both tax and penalty would be due on the earnings. So, what exactly is the contradiction you found? -Mark Bole -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Advantages of having mutual fund company withhold taxes for first-time home purchase distribution? March 20, 2007, 3:05 pm Good time to convert trad. IRA to Roth? November 24, 2008, 2:03 pm First time Home buyer September 3, 2008, 10:54 am Tax credit for first time home buyer August 28, 2008, 10:22 am first time buyer home credit January 30, 2009, 1:33 pm First time home Buyer Credit ? September 24, 2009, 11:34 am First-time home buyer credit and definition of "occupy" for new construction February 14, 2009, 12:56 am Dependent? Son age 24, military discharged, living at home, full-time student April 2, 2007, 5:58 pm Co-mingled Roth - distribution of earnings? April 30, 2007, 11:22 am Roth IRA Distribution and 1099R problem September 30, 2008, 9:00 pm