ajuroff Posted February 15, 2009 Report Share Posted February 15, 2009 This is from my earlier post - After talking to one of my three situations today - the guy tells me that he took out the IRA ($13,500) to rebuild his home. He said his ex-wife left the state and left him with the children so he had to add additions on to his home, which was originally a small one bedroom home. He says he has all the receipts to back it up...we'll see. So, I'm checking out the "exceptions" to the 10% penalty. Instructions to the 5329 say "IRA distributions made for purchase of a first time home, up to $10,000". Publication 17 says "You use the distributions to buy, build, or rebuild a first home". What would be your idea of "rebuilding" a home? (with his wording, I'm thinking he's reading something or someone is telling him something) Quote Link to comment Share on other sites More sharing options...
cathyan Posted February 16, 2009 Report Share Posted February 16, 2009 I don't think I would consider an addition "rebuilding". Maybe if it was completly gutted and kitchen/bathroom moved to a different area to fit new bedrooms, a total new layout of rooms. But not just the addition of a bedroom or two. I think the 'rebuild' is more in the case of some kind of disaster, and roof, siding, etc need to be rebuilt. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 16, 2009 Report Share Posted February 16, 2009 It has to be a first home. Look to the definition of first home. Quote Link to comment Share on other sites More sharing options...
ajuroff Posted February 16, 2009 Author Report Share Posted February 16, 2009 It is his first home - but - I'm questioning the "date of acquisition". Pub 509 states: 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. He has owned this home for many years, therefor had an interest in the home during the 2 year period ending on the date of acquisition. (which would be the date the "rebuilding" began..in Feb of 08) Am I understanding this correctly? Quote Link to comment Share on other sites More sharing options...
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