Section 316.801 - Addition for certain amounts withdrawn; penalty; exceptions(1) There shall be added to federal taxable income the amount of funds a taxpayer withdraws from a first-time home buyer savings account established under ORS 316.797, if:(a) Those funds were used for a purpose other than eligible costs;(b) In this tax year or a previous tax year, those funds were subtracted or exempted from federal taxable income under ORS 316.798; and(c) Those funds were not deposited into another first-time home buyer savings account held by the taxpayer.(2) There shall be added to federal taxable income the amount of funds a taxpayer holds in a first-time home buyer savings account not expended on eligible costs by December 31 of the last year of the 10-year period described under ORS 316.798(3) if in a previous tax year those funds were subtracted or exempted from federal taxable income under ORS 316.798.(3) The Department of Revenue shall assess a penalty against the taxpayer in the amount of five percent of the funds withdrawn from a taxpayer's first-time home buyer savings account, if: (a) The withdrawal of funds occurs during the 10-year period set forth in ORS 316.798(3); and(b) The withdrawn funds are not used for eligible costs or deposited into another first-time home buyer savings account held by the taxpayer.(4) The penalty described in subsection (3) of this section does not apply to any funds withdrawn from a first-time home buyer savings account of:(a) A taxpayer who is deceased;(b) A taxpayer who has filed for protection under the United States Bankruptcy Code (11 U.S.C. 101 et seq.); or(c) A taxpayer whose loss of use or function of any portion of the body permanently incapacitates the taxpayer from regularly performing work at a gainful and suitable occupation.