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?



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. 

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