Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Next Thread
Author: kchandlersmith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121482  
Subject: 1st Time Home Purchase w/Non IRA Date: 2/6/2000 1:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I purchased a home in 7/99 and use a disbursement from my employer's profit sharing plan. I am confused as to whether this disbursement will be subject to the 10% penalty or not. The instructions to IRS Form 5329 say that I would be exempt from the penalty only if I used an IRA. Now, as I'm about to submit my 1040 via e-mail on turbotax.com it says that I am exempt from the penalty. Does anyone know the answer to this perplexing problem?
Print the post Back To Top
Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27539 of 121482
Subject: Re: 1st Time Home Purchase w/Non IRA Date: 2/6/2000 7:30 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<<I purchased a home in 7/99 and use a disbursement from my employer's profit sharing plan. I am confused as to whether this disbursement will be subject to the 10% penalty or not.>>

If you are under age 59 1/2, you bet that it'll be subject to the 10% penalty. The penalty relief for a first time homebuyer only accrues from an IRA...and not from a qualified plan.

<< The instructions to IRS Form 5329 say that I would be exempt from the penalty only if I used an IRA.>>

Yup...that's the way the law reads...

<< Now, as I'm about to submit my 1040 via e-mail on turbotax.com it says that I am exempt from the penalty. Does anyone know the answer to this perplexing problem?>>

I can't speak to what TurboTax says. But if you took a distribution from a qualified plan, the 10% penalty will apply. The penalty relief is from an IRA (either Roth or Traditional) only.

Sorry...
TMF Taxes
Roy

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Next Thread
Advertisement