You would use Form 5329 to exclude the early withdrawal penalty on up to $10k of that distribution.

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Can you be a first time home buyer if you owned a house and got divorced . G ave house to your husband. After the divorce and you are buying a house for the first time by yourself?

Thank you so much for your help

Taxpayer does not have an early withdrawal penalty due to her age (76) but she was told she can exclude up to $10,000 of her $136,000 distribution for purchasing her first home. I am not finding anything on the exclusion for persons of her age.

@tambi 

Susan (sjr) already answered your question and told you your client doesn't qualify for any exclusion.

https://proconnect.intuit.com/community/tax-talk/discussion/1st-time-homebuyer-age-76/00/217364

I hope she got the advice she was given in writing - she might have some legal recourse against that advisor.