On Feb 19, 9:59�am, NadCixelsyd <nadcixel...[at]aol.com> wrote:
- quote -

You CANNOT borrow money from your IRA, for ANY reason. To do so would
be a prohibited transaction and be deemed as a total distribution of
the IRA, subject to tax and early withdrawal penalties.

You CAN, however, use/withdraw up to $10,000 to acquire a "first
residence", which would be taxable but not subject to the early
withdrawal penalty. This a lifetime limit for this exclusion. See IRS
Pub 590 for additional detail.


- quote -

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Or - Should I borrow from my IRA to purchase a residence?

I have $44,000 in my IRA and I'm about to purchase my first residence
(a condominium). Can I borrow from my IRA, pay interest to my IRA and
deduct that interest?

I'm already putting about 30% down on a $280k purchase. I can get a
mortgage at 5.5%. If I borrow from my IRA, I can pay 7.5% interest to
myself. Is this deductible? Should I take out a larger mortgage or
borrow from my IRA? If I were not paying to myself, it seems like a
poor choice.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >