IRA – First time homebuyer
A client has been purchasing a home on a land contract for the past three years. He says that according to the county clerk, his name is not on the deed. Would he qualify as a first time home buyer if he were to take a distribution from his IRA to purchase the home? He is under age 59-1/2.
Permalink Submitted by Alan - IRA critic on Tue, 2013-11-05 23:44
I don’t know of any IRS guidance on a contract of sale purchase. The date of acquisition for this penalty waiver before which client can have no interest in a main home starts with the signing of the contract of sale, not with the payoff of the purchase contract when the deed is recorded. If client meets that qualification and had no interest in a main home for 2 years prior, he might consider taking an aggressive approach and claim the penalty waiver limited to 10k lifetime. The exception is claimed by attaching Form 5329 to his return and entering code 09. Cannot state with any certainty that this would not be challenged.
Permalink Submitted by Dennis Prout on Wed, 2013-11-06 13:24
Do you know of any specific definition from the IRS as to what “interest in a main home” means?