Using First Time Home Buyer exception to buy a duplex

[Chris Clark]

I've looked multiple different places and haven't found anything discussing this. Anyone have any specifics if you can use the first time home buyer exception to buy a multi family home? I imagine it wouldn't qualify for more than 4 units but can't find anything specific.

[George Blower]

@Chris Clark

Did you review (IRC Sec.72(t)(2)(F)).

The distribution may be taken to pay the qualified acquisition costs for a principal residence of a first-time homebuyer who is the IRA owner, the IRA owner's spouse, or the IRA owner's child, grandchild, or ancestor of the IRA owner or her spouse.

The interpretation  is yes a duplex would also fall under this exception since it is your primary residence.

The aggregate amount of IRA distributions taken by an IRA owner that may be treated as qualified first-time homebuyer distributions cannot exceed a lifetime limit of $10,000.

first-time homebuyer. A first-time homebuyer, for purposes of the early distribution penalty tax exception, is an individual (and the individual’s spouse) who had no present ownership interest in a principal residence during the two-year period ending on the date of acquisition of the principal residence.