First Time Homebuyer

[Duane Anderson]

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

[Lion]

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.

[taxmom34]

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

[jimmcg]

Fthc

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.

[bgiez]

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.