My point being, there are more eligibility factors for the taxpayer, for this to be a qualified first time home buyer and avoiding an early withdrawal penalty.

It's not only that there is a lifetime limit (per person), For instance, we were told only 1099-R. Not what sort of plan or account. That's why it helps to do your own research, for how it applies to your taxpayer.

If you qualify as a first-time homebuyer, you can withdraw up to $10,000. Because IRAs are individual retirement accounts, your spouse can also withdraw up to $10,000 from an IRA.

First time homebuyer distribution is not an exception if taken from Qualified Retirement Plans (401(k), etc). Only from IRA, SEP, SIMPLE IRA. And Roth have different provisions (distribution ordering, 5-year rules) for early distributions.

The money must be used to buy, build, or rebuild a home within 120 days of its receipt, to pay qualified acquisition costs associated with the first-time purchase of a principal residence. Not a vacation or second home.

It can qualify for the exemption if the money is to help a home buyer who is an eligible child, grandchild, or parent buy a home, even if you're a homeowner now.

It's for a principal residence only. The term principal residence means the same as it does for calculating the excludability of gain on sale under section 121.

You are considered a first-timer if you (and your spouse, if you have one) haven't owned a home (principal residence) at any point during the past two years. (The two-year period ends on the date of acquisition of the home you are looking to purchase.)