Question

Which of the following IRA distributions is exempt from the 10% early withdrawal penalty? Hardship withdrawal...

Which of the following IRA distributions is exempt from the 10% early withdrawal penalty?

Hardship withdrawal

First home acquisition cost up to $10,000

Qualified loan of $10,000 for first home purchase

Separation from service at age 55
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Answer #1

First home acquisition cost up to $10,000 is specifically exempt .

If you are a first time home buyer, you can withdraw $10000 from IRA and you can use the money to buy, build and rebuild a home.

So It is exempt from the 10% early withdrawal penalty  

The correct option is (B).

Hardship Withdrawals are penalty levied for early distribution and Qualified loans are also not allowed. Seperation from service is also not exempt. So all Three options except (B) is wrong.

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