First home. Even if you are under age 59½, you do not have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.
It must be used to pay qualified acquisition costs (defined later) before the close of the 120th day after the day you received it.Qualified acquisition costs. Qualified acquisition costs include the following items.
It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined later) who is any of the following: yourself, your spouse, your or your spouse's child, your or your spouse's grandchild, your or your spouse's parent or other ancestor.
When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000.
Costs of buying, building, or rebuilding a home.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.
Any usual or reasonable settlement, financing, or other closing costs.
thetall1 wrote:Is this info. still accurate (no changes in laws or just specific to some 401k's)? I'm looking into a way to avoid SS with a cash settlement. I'd really like to offer up some of my 401k to her as a lump sum in order to avoid any sniff of alimony. If I can find a way to do so without the 10% penalty I think it would increase my chances.
mbxdad if you're still around and this has been over a year, can you post on whether everything regarding your post on avoiding the 10% penalty worked out for you?
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