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Author: JackBrosch Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Qualified for "first time homebuyer" d Date: 5/29/1999 3:37 PM
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In about 1984 I purchased a home in Rio Linda, Calif. I have not lived in this house since 1992.  I keep the house as investment property.  I married my current wife in 1996 and she has not owned a house in at least the last 20 years.  We anticipate a $4,000 distribution to pay for half the closing costs on the house. 

Here is the $64,000 question - ok $400 question - Do we qualify for a "first time homebuyer deduction" ??
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Author: TaxService Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 15852 of 121219
Subject: Re: Qualified for "first time homebuyer&quo Date: 5/29/1999 7:47 PM
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In about 1984 I purchased a home in Rio Linda, Calif. I have not lived in this house since 1992. I keep the house as investment property. I married my current wife in 1996 and she has not owned a house in at least the last 20 years. We anticipate a $4,000 distribution to pay for half the closing costs on the house.

Here is the $64,000 question - ok $400 question - Do we qualify for a "first time homebuyer deduction" ??

***If you are talking about using IRA funds that will not be subject to penalty for early withdrawal, and if both husband and wife are first-time homebuyers, they each can withdraw up to $10,000 penalty-free for a first home.

A first-time homebuyer is, generally, any individual (and his or her spouse, if married) who had no present ownership interest in a main home during the 2-year period ending on the date the individual acquires the main home to which these rules apply.

It appears that you both qualify, based on what you have told us. When it comes to a definition, for purposes of state law (or other programs)we'd have to check that out. For instance, you may want to look at this info regarding Mortgage Interest Credit. Just mouse the URL for more info:

http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p53002.htm

Hope this helps!=:)

"Jack"


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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: 15883 of 121219
Subject: Re: Qualified for "first time homebuyer&quo Date: 5/31/1999 2:40 PM
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[[In about 1984 I purchased a home in Rio Linda, Calif. I have not lived in this
house since 1992. I keep the house as investment property. I married my
current wife in 1996 and she has not owned a house in at least the last 20 years.
We anticipate a $4,000 distribution to pay for half the closing costs on the
house.

Here is the $64,000 question - ok $400 question - Do we qualify for a "first
time homebuyer deduction" ??]]

While it may not make any sense, it appears that you WOULD qualify for the "first time homebuyer" penalty exclusion.

The law clearly states (at least, clearly to me), that as long as you didn't have an interest in a PRINCIPAL residence for at least the last two years, then you can qualify for the penalty exclusion.

As you stated, you have not had an interest in a principal residence since 1992...well over the two year period.

So while it may seem odd that you can own "investment property" and still qualify for the penalty free treatment, the law certianly appears to be in your favor.

You can read more about this penalty free IRA distribution in my post on this very issue in the Taxes FAQ area. You might want to check it out.

TMF Taxes
Roy

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