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2013 SESSION

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HB 1868 First-time home buyer; savings accounts for purchase of single-family residences, tax exemption.

Introduced by: Thomas A. Greason | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED HOUSE: (all summaries)

First-time home buyer savings account. Establishes beginning in 2013 first-time home buyer savings accounts that accrue tax-free income and that are to be used for saving funds for the purchase of homes by first-time home buyers. Funds in the account, including any income, would be exempt from individual income tax so long as withdrawals from the account are used for the down payment and allowable closing costs (eligible costs) for the purchase of a home by a first-time home buyer. The bill limits the amount of principal that can be contributed to any account to $50,000. Persons would be allowed to contribute only cash or marketable securities to a first-time home buyer savings account. Capital gains, interest income, or other income earned with regard to funds contained in the account would be excluded from income in computing Virginia individual income tax. However, if funds are withdrawn from the account for purposes other than to pay eligible costs, a penalty of 10 percent of the amount withdrawn would be imposed. In addition, the amount so withdrawn would be subject to individual income tax. No penalty or income tax would be imposed if the withdrawal is (i) because of the death or disability of the account beneficiary, (ii) a disbursement of assets pursuant to a filing for protection under federal bankruptcy laws, or (iii) a transfer of assets between first-time home buyer savings accounts.


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