Colorado § 39-22-4705 Eligible expenses - penalties for other uses

Colorado Statutes

§ 39-22-4705 — Eligible expenses - penalties for other uses

Colorado § 39-22-4705

Title 39Taxation

Art.Income Tax

This text of Colorado § 39-22-4705 (Eligible expenses - penalties for other uses) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 39-22-4705 (2026).

Text

(1)(a) For purposes of the income tax benefit conferred under this part 47, the money in a first-time home buyer savings account may be:

(I)Used for eligible expenses related to a qualified beneficiary's purchase of his or her primary residence in the state;

(II)Used for eligible expenses related to a qualified beneficiary's purchase of his or her primary residence in or outside the state, if the qualified beneficiary is active-duty military and was stationed in Colorado for any time after the creation of the account;

(III)Used for expenses that would have qualified under subparagraph (I) or

(II)of this paragraph (a), but the contract for purchase did not close;

(IV)Transferred to another newly created first-time home buyer savings account; or

(V)Used to pay a service f

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(1) (a) For
purposes of the income tax benefit conferred under this part 47, the money in a
first-time home buyer savings account may be:

(I) Used for eligible expenses related to a qualified beneficiary's purchase of
his or her primary residence in the state;

(II) Used for eligible expenses related to a qualified beneficiary's purchase of
his or her primary residence in or outside the state, if the qualified beneficiary is
active-duty military and was stationed in Colorado for any time after the creation of
the account;

(III) Used for expenses that would have qualified under subparagraph (I) or
(II) of this paragraph (a), but the contract for purchase did not close;

(IV) Transferred to another newly created first-time home buyer savings
account; or

(V) Used to pay a service fee that is deducted by the financial institution.

(b) Paragraph (a) of this subsection (1) applies regardless of whether the
qualified beneficiary is the sole owner of the primary residence or joint owner with
another person who does not qualify as qualified beneficiary. The money in a first-time home buyer account may not be used for the purposes in subparagraphs (I), (II),
and (III) of paragraph (a) of this subsection (1) related to the purchase of a
manufactured or mobile home that is not taxed as real property.

(2) Money withdrawn from a first-time home buyer savings account is
subject to recapture in the taxable year in which it is withdrawn based on a
proportion from the account subtracted under section 39-22-104 (4)(w)(I) to the
total amount in the account, if:

(a) At the time of the withdrawal, it has been less than a year since the first
deposit in the first-time home buyer savings account; or

(b) The money is used for any purpose other than those specified in
subsection (1) of this section.

(3) If any money is subject to recapture under paragraph (b) of subsection (2)
of this section, the account holder shall pay to the department a penalty in the
same taxable year as the recapture. If the withdrawal was made ten or fewer years
after the first deposit in the first-time home buyer savings account, then the
penalty is equal to five percent of the amount subject to recapture, and if the
withdrawal was made more than ten years after the first deposit in the account,
then the penalty is equal to ten percent of the amount subject to recapture. But
these penalties do not apply if:

(a) The money is used for eligible expenses related to a qualified
beneficiary's purchase of his or her primary residence outside of the state; or

(b) The money is from a first-time home buyer savings account for which the
qualified beneficiary dies and the account holder does not designate a new
qualified beneficiary during the same taxable year.

(4) If the account holder or, if the first-time home buyer savings account is
jointly owned, account holders die, then all of the money in the account that was
subtracted from taxable income is subject to recapture in the taxable year of the
death or deaths, but no penalty is due to the department.