"Arthur Kamlet" <kamlet[at]panix.com> wrote in message
news:grmhr8$2ra$1[at]reader1.panix.com...
- quote -

My wife never took any money from the 401k, and directly rolled it over to
the IRA. I assume that she had no "nondeductible" contributions.

Thank you.

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Thank you for the replies.

What about this scenario:

I borrow 10K from a friend, use it as part of the downpayment, and after the
deal closes, I take out 10K from the IRA and give it "back" to the friend.
Would this also be acceptable?

"Michael B." <mystic02remove_this_part[at]verizon.net> wrote in message
news:_UuDl.2659$6n.147[at]nwrddc01.gnilink.net...
- quote -

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Michael B. wrote:

- quote -

Why would you take the money out before having a confirmed closing date?
When my clients need to withdraw cash from their brokerage based IRA,
the transfer from the IRA to their cash account happens same day, and
they can write a check against it immediately. You should be able to
show the bank (from which you're getting the mortgage) the IRA statement
and withdraw the funds only when you are 100% sure you are going to close.
Joe

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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. > << ------------------------------------------------------- >

"Arthur Kamlet" wrote:

- quote -

How? I assume you're talking about a rollover, and the time limit for that
is 60 days after the money came out of the IRA.

What I'd suggest is doing a direct transfer of the $10,000 (plus enough to
pay the tax on it?) to an IRA at your bank early in the process. This does
not count against the once in 12 months limit on rollovers. Now you can get
your hands on the cash the day you need it.

If you get to the point that the lender wants it in a regular account rather
than an IRA, do that, and your 60 day clock starts running. Make it a
condition of your contract that the sale closes within that 60 days or it's
off. Just make sure not to use that as earnest money so you can put it back
in an IRA within the 60 days if the deal fails to close.

---------------------
Phil Marti, VITA Volunteer
Clarksburg, MD

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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. > << ------------------------------------------------------- >

In article <_UuDl.2659$6n.147[at]nwrddc01.gnilink.net> ,
Michael B. <mystic02remove_this_part[at]verizon.net> wrote:
- quote -



If the IRA had no nondeductible contributons, you haveit correct.


- quote -



So use it for the downpayment.




but what happens if we take the money and the
- quote -


If the deal falls through, and you put the moneys back into an IRA
within the 120 days, you'll be OK. You can do this once a year. The
10,000 figure is a lifetime maximum amount for new house purchase.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

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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. > << ------------------------------------------------------- >

My wife and I are very close to buying our first-time home (a house), and I
just found some materials that supposedly one can withdrawal up to $10K from
their IRA without being penalized 10%, however we would still be taxed on
this amount. Is this still true?

http://www.fool.com/Money/AllAboutIR...boutiras12.htm

We would be taking the $10K from my wife's Rollover IRA account (old 401k
that was rolled over into this when she left her old job two years ago).
This is her only account and I don't have an IRA account, so this would be
the only one we would tap.

How do we prove that this was used for a home buy? As I understand it, this
must be done within 120 days of the actual purchase (closing) of the home.
This really sucks as we could use this money towards the downpayment (so we
have less mortgage balance), but what happens if we take the money and the
final closing never happens?

I appreciate all feedback.

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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. > << ------------------------------------------------------- >