Tax Retirement And Pension Income Practice Test

The $10,000 is includible in gross income, but the 10% additional tax does not apply because up to $10,000 may qualify for the first-time homebuyer exception.

The $10,000 is includible in gross income and subject to the 10% additional tax because the first-time homebuyer exception applies only to Roth IRAs.

The $10,000 is excluded from gross income because first-time homebuyer IRA distributions are tax-free.

Only $5,000 is includible in gross income because the other $5,000 is excluded under the first-time homebuyer rule.