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Author: omni100 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121182  
Subject: First time home buyer Date: 8/11/2004 5:20 AM
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What is the definition of a first time home buyer? I have owned homes in the past, but do not own one now or for the last eight years. Am I eligible for the tax free use of $10,000 from my IRA or 401K?
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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 72802 of 121182
Subject: Re: First time home buyer Date: 8/11/2004 7:22 AM
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What is the definition of a first time home buyer? I have owned homes in the past, but do not own one now or for the last eight years. Am I eligible for the tax free use of $10,000 from my IRA or 401K?

Well, this is from IRS Pub 590:

First-time homebuyer. Generally, you are a first-time homebuyer if you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse must also meet this no-ownership requirement.

So - as far as the IRS is concerned, if you haven't owned a home in the past two years, you're a first-timer. But note that the first-time-buyer provision simply waives the 10% early-distribution penalty. It doesn't necessarily make the use of the money tax-free. If you're talking about a traditional IRA to which you've contributed pre-tax dollars, you're still going to have to pay tax on at least part of the distribution.

Lorenzo

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 72803 of 121182
Subject: Re: First time home buyer Date: 8/11/2004 9:22 AM
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Am I eligible for the tax free use of $10,000 from my IRA or 401K?

Caution: the penalty exception does not apply to distributions from 401(k)'s, only from IRAs. It's part of simplification.

Phil

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Author: DWSZ Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 72804 of 121182
Subject: Re: First time home buyer Date: 8/11/2004 11:45 AM
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Phil wrote;

It's part of simplification."

Careful folks! I think Phil got a bad batch of "loco weed" or somethin'! ;)

Best regards,
Duane

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