GeorgeM Posted March 21, 2008 Report Share Posted March 21, 2008 I had a client come in and tell me that they are building a new home. They withdrew money from an IRA to pay some of the cost, and told me that they are considered as a 1st time home buyer. They had a previous home 3 or 4 years ago and was told by the bank and real estate people that they are considered a 1st time home buyer if they hadend owned a home for at least 2 years prior. Is this true? Quote Link to comment Share on other sites More sharing options...
Booger Posted March 21, 2008 Report Share Posted March 21, 2008 I believe the term "First Time Home Buyer" means EXACTLY that...the taxpayer's FIRST home bought. Booger Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 21, 2008 Report Share Posted March 21, 2008 I believe the term "First Time Home Buyer" means EXACTLY that...the taxpayer's FIRST home bought. Booger Each state has different rules. If you sell a house and you move to another state and buy another house, you are considered a first time home buyer. If 3 years have passed, you are considered first time home buyer. Quote Link to comment Share on other sites More sharing options...
Booger Posted March 21, 2008 Report Share Posted March 21, 2008 Does State Law govern re the definition, or do the Feds? Booger Quote Link to comment Share on other sites More sharing options...
GeorgeM Posted March 21, 2008 Author Report Share Posted March 21, 2008 Each state has different rules. If you sell a house and you move to another state and buy another house, you are considered a first time home buyer. If 3 years have passed, you are considered first time home buyer. Pacun, where can I find this I have been looking but have not yet fourd it so I can keep a copy of it in the file of the client? Quote Link to comment Share on other sites More sharing options...
jainen Posted March 21, 2008 Report Share Posted March 21, 2008 >>They withdrew money from an IRA to pay some of the cost<< For purposes of Exception #09 on Form 5329, which exempts the first $10000 from the 10% Early Distribution Penalty, a first-time buyer is someone who has not owned a principal residence for at least two years. I suppose that applies to building a home that will be a principal residence, but it doesn't buy much lumber. Also, it can only be used once in a lifetime, so it would be better to call him a first-time exceptionator. Quote Link to comment Share on other sites More sharing options...
zeke Posted March 21, 2008 Report Share Posted March 21, 2008 NOt within the facts given, but if BOTH H&W withdrew $10K from individual IRAs they could file 2 forms 5329 and claim total exemption of $20K?? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 24, 2008 Report Share Posted March 24, 2008 NOt within the facts given, but if BOTH H&W withdrew $10K from individual IRAs they could file 2 forms 5329 and claim total exemption of $20K?? Yes, they will not pay penalty on $20K if both are firts time home buyers. Quote Link to comment Share on other sites More sharing options...
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