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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 A first-time home buyer, 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).
Petitioners cannot avail themselves of the first-time home
buyer exception. While the record is not entirely clear, the
parties stipulated that “During 2001, petitioners were existing
homeowners residing at 4934 Raffaele Drive, Sierra Vista,
Arizona”. There was no argument put forth by petitioners that
this was not their principal residence. Based on this record, we
conclude that petitioner’s IRA distribution does not come within
the provisions of section 72(t)(2)(F).
Petitioners argue that the withdrawal did not cause the
Government harm because they have other retirement accounts, and
that petitioners will not be a burden to the Government when they
2 There is a lifetime limitation of $10,000 pursuant to sec.
72(t)(8)(B).
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Last modified: May 25, 2011