I've been researching PUB 590 (page 55) and the IRS code (72(t)(2)(F)) and seem to find some contradictions. My wife and I are purchasing our first home together. I currently own a home and she has never had an ownership interest in a home.
My question is can my wife use 10K from her Roth since she is a first time home buyer where I exclusively have ownership in the home we currently live in ??
And if the answer is yes can you please site the code.
Thanks!!!!
Martin.
Well, she can't qualify for the exception to the 10% early distribution penalty since you (spouse) don't meet the definition of a first-time homebuyer, Pub 590 is pretty clear on that:
"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."
However, you can *always* withdraw *contributions* (not conversions) to a Roth at any time for any reason with no tax or penalty, so if she contributed at least $10K over the years, no problem. If the $10K includes *earnings* or conversions, and she's under age 59.5, then more rules apply, and most likely both tax and penalty would be due on the earnings.
So, what exactly is the contradiction you found?
-Mark Bole
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