Roth ira & homebuyer

[EA_TAX]

Question:IRCSection 72(t)8(D)(i)(I) Roth IRA early withdrawals

Background: Client has Roth IRA, held for over 5 years, age 46, married with children. He and wife have separated, living separately, he moved out, wife is in the original home with children. There original home is paid for, no mortgage. Original mortgage in both husband and wifes' names.

He needs to set up a new home, is he able to take a $10,000 withdrawal from his Roth IRA without penalty to purchase a home?

Rules as I understand them, are ROTH IRA withdrawals prior to 591/2 is $10,000 withdrawal allowed for first time homebuyer only. Any exceptions for separation and divorce?

Thank you in advance.
EA_TAX, NY

[Lion]

If it's a Roth, he can take out his principal at any time for any reason with no tax consequences.

[taxmom34]

lion is correct but, he wouldn't qualify because he is not divorced and the exception says "has not owned a principal residence for at least two years."

[Lion]

But, he doesn't need an exception to avoid the 10% penalty if he takes out his principal, nor is he limited to $10,000 from a qualifying Roth.

[Rapid Robert]

But, he doesn't need an exception to avoid the 10% penalty if he takes out his principal, nor is he limited to $10,000 from a qualifying Roth.

Hard part usually is verifying the contribution/conversion basis in the Roth -- it's very easy to lose the carryforward info if taxpayer ever switched preparers or DIY software over the years. I've had to scour IRS transcripts for Form 8606 and Form 5498 info going back many years in a few cases.