IRA withdrawal for land to build house on

[schirallicpa]

Trying to avoid the extra penalty- first time home buyer. The land is where they will build their house.  Stretching a little? 

[Lee B]

Excerpts from Internal Revenue Code Section 72(t)(2)(F):

 

"(8) Qualified first-time homebuyer distributions. For purposes of paragraph (2)(F) - (A) In general. The term "qualified first-time homebuyer distribution" means any payment or distribution received by an individual to the extent such payment or distribution is used by the individual before the close of the 120th day after the day on which such payment or distribution is received to pay qualified acquisition costs with respect to a principal residence of a first-time homebuyer who is such individual, the spouse of such individual, or any child, grandchild, or ancestor of such individual or the individual's spouse."

 

"(C) Qualified acquisition costs. For purposes of this paragraph , the term "qualified acquisition costs" means the costs of acquiring, constructing, or reconstructing a residence. Such term includes any usual or reasonable settlement, financing, or other closing costs. "

 

"(iii) Date of acquisition. The term "date of acquisition" means the date- (I) on which a binding contract to acquire the principal residence to which subparagraph (A) applies is entered into, or (II) on which construction or reconstruction of such a principal residence is commenced. "