Lina, age $32,$ has a high$-$deductible health plan $($HDHP$)$ at her work. She is single and contributes $$3,000$ each year to her HSA plan. She rarely uses the funds, so she has built up a balance. If Lina took $$10,000$ from the HSA for a down payment toward buying a house, what would the tax outcome be$?$

Lina can withdraw contributions without any tax impact. After all, it is her money, so she can use it if she needs to$.$

If she withdraws $$10,000,$ Lina would have to count that as taxable income and pay a $10\%$ penalty $($$$1,000)$ for an early withdrawal.

If she withdraws $$10,000,$ Lina would have to count that as taxable income and pay a $20\%$ penalty $($$$2,000)$ for a nonqualified distribution.

If she withdraws $$10,000,$ Lina would have to pay a $20\%$ penalty $($$$2,000)$ for a nonqualified distribution. There is no other tax impact.