IRA withdrawal time frame

[bullabulla]

I started IRA last year 2007 , paid some X amount into that mainly to save taxes.

Can i withdraw from IRA in 2008 for FIRST TIME House Downpayment ? Or is there a 5 year limit

Please let me know

thanks

[noppenbd]

I believe you will have to pay a 10% penalty plus taxes on any earnings (which you may not have!).

Tax Topics - Topic 428 Roth IRA Distributions

[kork13]

You said you put it in an IRA to "save taxes"... Sounds like a Traditional IRA, correct? If so, linked below is the pub on Traditional IRAs, with the home-buying portion quoted... I can't find mention of a 5 year minimum on contributions, though there is the restriction on using it w/in 120 days... You probably should talk to someone who can authoritatively answer that one...
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Source: http://www.irs.gov/publications/p590/ch01.html#d0e6773
First home. Even if you are under age 59½, you do not have to pay the 10% additional tax on up to $10,000 of distributions you receive to buy, build, or rebuild a first home. To qualify for treatment as a first-time homebuyer distribution, the distribution must meet all the following requirements.

1. It must be used to pay qualified acquisition costs (defined later) before the close of the 120th day after the day you received it.
   
2. It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined later) who is any of the following.

1. Yourself.
2. Your spouse.
3. Your or your spouse's child.
4. Your or your spouse's grandchild.
5. Your or your spouse's parent or other ancestor.
6. When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000.

If both you and your spouse are first-time homebuyers (defined later), each of you can receive distributions up to $10,000 for a first home without having to pay the 10% additional tax.