Keith Lamar Jones - Page 5

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         of the portion of such amount that is includable in gross                    
               Section 72(t)(2)(E) provides that the additional tax on                
          early distributions does not apply to “Distributions to an                  
          individual from an individual retirement plan to the extent such            
          distributions do not exceed the qualified higher education                  
          expenses * * * of the taxpayer for the taxable year.”  An                   
          individual retirement plan is commonly referred to as an IRA.               
          Section 72(t)(2)(F) provides, in relevant part, an exception to             
          the 10-percent additional tax for distributions to an individual            
          from an IRA which are qualified first-time home buyer                       
          distributions.  A “qualified first-time home buyer 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 home buyer who is such individual.                
          Sec. 72(t)(8)(A).2                                                          
               An IRA is defined as:  “(A) an individual retirement account           
          described in section 408(a), and (B) an individual retirement               
          annuity described in section 408(b).”  Sec. 7701(a)(37).                    
          Retirement plans qualified under section 401(a) and 401(k) are              
          not included in the definition of “individual retirement plan,”             

               2 There is a lifetime limitation of $10,000 pursuant to sec.           

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Last modified: May 25, 2011