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Subject:  Re: IRA's and First Time Home Buyer Date:  12/2/1999  3:25 PM
Author:  TMFPixy Number:  15845 of 88544

Greetings, ToddRA, and welcome. You asked:

<<I understand that $10,000 can be withdrawn from an IRA without paying a penalty for first time home purchases. Is this available for both traditional IRA's and Roth IRA's?>>

Yes, it is; however, in a Roth IRA it doesn't begin until your withdrawal exceeds your original contributions. Contributions may be taken at any time for any reason free of tax and penalty. For earnings, you must wait until age 59 1/2 (unless you meet one of the authorized exceptions for early IRA withdrawal) plus the account must have been open for five years. However, the first-time home purchase is one of the exceptions. If the Roth IRA has been open for five years, then a withdrawal of earnings for that purpose will be both tax and penalty-free. If taken within five tax-years of the account's opening, then the withdrawal will be penalty-free but the earnings taken will be taxed.

<<Also, is the $10,000 limit a per person limitation? Can my wife and I, filing married jointly and purchasing a first home, each withdraw $10,000 from our seperate IRA's to purchase the same house for a total of $20,000 withdrawn between the two of us?>>

Yes you may. The lifetime limit applies to the IRA owner. If both you and your spouse own IRAs, then both of you may take up to $10K from those IRAs for a first-time home purchase.

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