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taxpayer’s attaining the age of 59-1/2 that are includable in
income are generally subject to a 10-percent early withdrawal tax
unless an exception to the tax applies. Sec. 72(t)(1).
As relevant herein, section 72(t)(2)(F) exempts
distributions from the early withdrawal tax to the extent such
distributions are qualified first-time homebuyer distributions.
See sec. 72(t)(2)(F), (8). The maximum amount of a distribution
that may be treated as a qualified first-time homebuyer
distribution is $10,000. Sec. 72(t)(8)(B). Any amount of a
distribution that petitioners received in excess of $10,000
remains subject to the 10-percent additional tax required by
section 72(t). Id.
A qualified first-time homebuyer distribution is defined in
section 72(t)(8)(A) as:
(A) In general. -- * * * 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, the spouse of such individual, or
any child, grandchild, or ancestor of such individual
or the individual’s spouse.
As relevant herein, a first-time homebuyer 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).
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Last modified: May 25, 2011