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| Subject: Re: Buying Real Estate in an IRA | Date: 8/1/2002 10:01 PM | |
| Author: TMFTaxes | Number: 61082 of 118626 | |
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<<I believe Roths have to be open for a minimum of 5 tax years to avoid the 10% penalty. I think you owe 10% of the withdrawal. The earliest you could have opened up the account is 1998.>> Nope...the 10% penalty is waived for "first time homebuyers" when all of the other requirements for the "first time" exclusion are met. This is true regardless of how long the Roth IRA might have been opened. The 5 tax year rule doesn't apply with respect to the penalty exception for the "first time" homeowner exclusion. But I still think that the reader has a problem trying to apply the "first time" exclusion to a rental property. :-) TMF Taxes Roy |
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