- 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