ExRuminant wrote:

- quote -

The law has a definition in it--from IRC Section 72(t)(8)(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."

So, essentially, if the cost is for acquiring, constructing,
reconstructing the residence it is in, as well as other
related costs so long as they are "usual or reasonable".

That means, if challenged, you would need to support the
claim that what you paid was either a usual or reasonable
closing cost *or* was otherwise included in the three
categories of "acquiring, constructing or reconstructing."

The list you gave of expenses would, absent some strange
facts, all appear to fall into in appropriate category.

I'm assuming that you aren't looking at putting $10,000
down, since obviously the simplest solution is to use it
there and be done with the definition <grin> . That is, if
you can avoid the question I'm all in favor of avoiding it.

--
Ed Zollars, CPA
Phoenix, Arizona

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When it comes to the $10,000 IRA withdrawal allowance for
first-time homebuyers, how broad is the IRA's definition of
a "reasonable" homebuying expense? Does it cover just down
payments and fees, or can it be extended to things like a
commission paid to a buyer's agent, essential repairs, radon
inspection/mitigation and so forth?

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