Another exception to penalty

[ajuroff]

Clients have been "buying" home on land contract. Home was in mother's name until this year...factory client worked at closed and

client took out 401K and paid off land contract with mother. House is now in client's name.

Exception to the 10% penalty? I'm thinking no.

[lsowers]

Code Sec 72(t) does not allow a first-time homebuyer exception for a distribution from a 401(k). It only allows for a distribution from an IRA.

[mcb39]

Code Sec 72(t) does not allow a first-time homebuyer exception for a distribution from a 401(k). It only allows for a distribution from an IRA.

That has always been the case, hasn't it?

[ajuroff]

Yep, and I knew that. Been reading too much and have done a lot of "ugly" returns this year. Lots of factories closing in this

area....etc.

Thanks for setting my mind straight.