- 6 -
First Home Purchase Exception
Section 72(t)(2)(F) provides, in relevant part, an exception
to the 10-percent additional tax for “Distributions to an
individual from an individual retirement plan which are qualified
first-time homebuyer distributions”. (Emphasis added.) A
“qualified first-time homebuyer distribution” is “any payment or
distribution received by an individual to the extent such payment
or distribution is used by the individual * * * to pay qualified
acquisition costs with respect to a principal residence of a
first-time homebuyer who is such individual”. Sec. 72(t)(8)(A).
A “first-time homebuyer”, in relevant part, “means any individual
if such individual (and if married, such individual’s spouse) had
no present ownership interest in a principal residence during the
2-year period ending on the date of acquisition of the principal
residence”. Sec. 72(t)(8)(D)(i)(I). The date of acquisition, as
relevant herein, is the date on which construction of a principal
residence is commenced. Sec. 72(t)(8)(D)(iii)(II).
Section 7701(a)(37) defines individual retirement plan for
purposes of the Internal Revenue Code as an individual retirement
account described in section 408(a) and an individual retirement
annuity described in section 408(b). Retirement plans qualified
under section 401(a) and 401(k) are not included in the
definition of “individual retirement plan” under section
7701(a)(37). Therefore, because section 72(t)(2)(F) applies only
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011