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    First Time Homebuyer

    First time home buyer took $20,000 out of their IRA for a down payment on a home purchased....The 1099R was coded 1. Taxpayer is single, age 37. So how do I take the first time home buyer credit? Do we need to get the Custodian to re-issue the 1099, which is almost impossible these day, or can I reduce box 2 by the $10,000?

    Thanks,,,Duane Anderson

    #2
    The First Time Home Buyer Credit & Repayment is Form 5405.

    Do you mean how to avoid the 10% penalty on early withdrawal of up to $10,000 from his IRA to buy a home? Form 5329.

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      #3
      I thought that first time home buyer credit was no longer available (expired). however the exemption for the 10% penalty is available on $10,000

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        #4
        Fthc

        Originally posted by taxmom34 View Post
        I thought that first time home buyer credit was no longer available (expired). however the exemption for the 10% penalty is available on $10,000
        FTHC expired in 2010 to my knowledge.

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          #5
          Maybe you're thinking about the exception to the 10% penalty taking a $10,000 (not $20,000) IRA distribution for first time home buyers.

          See TTB 13-3. Both TP & spouse must be first time home buyers and they each could take a $10,000 distribution (I'm assuming that means each takes $10K from their own indivudual IRAs.) It's exception code 09 for form 5329.
          Last edited by bgiez; 03-24-2014, 08:39 PM.

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