An individual (and if married, such individual’s spouse) who had no present ownership interest in a principal residence during the 2-year period ending on the date of acquisition of the principal residence to which a first-time homebuyer distribution applies.
If a participant is married, his/her spouse must also satisfy the first-time homebuyer requirement in order for it to apply
IRC §72(t)(2)(F); Treas. Reg. § 1.121-3, Treas. Reg. § 1.1034-1(d)(1)
Additional Helpful Information
- Principal residence may include a houseboat, a house trailer, or stock held by a tenant-stockholder in a cooperative housing corporation , if the dwelling which the taxpayer is entitled to occupy as such stockholder is used by him as his principal residence. Property used by the taxpayer as his principal residence does not include personal property such as a piece of furniture, a radio, etc., which, in accordance with the applicable local law, is not a fixture.
- The term “date of acquisition” means the date –
- on which a binding contract to acquire the principal residence, or
- on which construction or reconstruction of such a principal residence is commenced
- Olup v. Commissioner, T.C. Summary Opinion 2005-183:The Tax Court ruled that a married couple was not eligible for the first time homebuyer exception, because one of the spouses owned a principal residence during the previous two-years