Simple IRA first time home buyer (prior to the 2 year requirement)
Client has a simple IRA. Simple IRA was established in March of 2020 (less than 2 years). Wants to use 10K as first time home buyer… Will client be penalized because of the 2 year rule?
Permalink Submitted by Alan - IRA critic on Mon, 2021-07-12 18:09
There will be ordinary income tax due, but a qualified first time homebuyer has an exemption from the 25% penalty on up to 10k lifetime. Form 5329 must be filed to claim the penalty exception.