My girl friend purchased her first home last fall and withdrew about $19,500 from her IRAs for the deposit.
Tax time is here and she is getting wacked with the penalties and taxes for that transaction. She is entitled to a $10,000 exemption for the first-time home buyer, leaving her with taxes and a 10% penalty on the $9500 difference.

My question is this, Is there any way to reimburse the IRAs to help avoid the penalty and taxes or does she just have to suck it up and pay?

Thanks for any help.

Bob

Generally, she should have repaid the amount within sixty days to treat the transaction as a non-taxable rollover. Obviously, that period has expired. Consult a professional tax advisor to determine if anything can be done at this point.

I trust she is enjoying her new home!

She is, thanks.

I will have her talk to one, soon. Thanks for the reply.

B