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I've checked all over for an answer to this, and I was redirected from the "Ask a Foolish Question" Board to the Tax Strategy folks here. Maybe you all could help!

I have just left a company and plan to rollover the money from that company's 401(k) plan into an IRA. I plan to do a direct rollover, and that will be simple enough.

So now I have this Rollover IRA with 100% of my 401(k) account transferred. After the rollover is completed, can I then take an exempted distribution from this IRA using the First-Time Homebuyer Clause ($10,000 lifetime limit)? I understand that the distribution would be taxed, but it should not be subject to the 10% early withdrawal penalty based on the Taxpayer's Relief Act of 1997, right?

Any advice would be greatly appreciated!
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