- 4 -
of the portion of such amount that is includable in gross
income.
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.
72(t)(8)(B).
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011