jjoonthego asked:
If I roll my cash balance pension benefit from a former employer in to an IRA, can I immidiately withdrawal $20,000 without paying the 10% penalty by using the $10,000 first time home buyer exception for both myself and my wife? I am 38 and the money would be used to purchase our first home.
If I roll my cash balance pension benefit from a former employer in to an IRA, can I immidiately withdrawal $20,000 without paying the 10% penalty by using the $10,000 first time home buyer exception for both myself and my wife? I am 38 and the money would be used to purchase our first home.
Thanks.
Jeremy
Rita
In publication 590 from the IRS:
“If both you and your spouse are first-time homebuyers (defined later), each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax.”
So that would give you the penalty exception. You’d just have pay to the regular tax.
Comment by 123456789 — September 18, 2009 @ 12:19 am
Marilyn
The pension plan is tied to *your* SSN. Only you can take out $10K and pay income taxes, but not penalty.
If your wife has her own IRA under her *own* SSN, she can take out $10K as well.
Comment by v b — September 19, 2009 @ 4:01 pm
Bryan
VB is correct, the other response is not.
Helen, EA in PA
Comment by Helen, EA in PA — September 20, 2009 @ 7:21 pm
Kelly
Not from the same IRA – but if you each have one, each of you could take out $10K from your own IRA without the 10% penalty – you’d still have to pay the income tax that year though..
Comment by Judy — September 23, 2009 @ 11:43 am