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Subject:  Re: Roth IRA withdrawl Date:  5/30/2000  9:14 AM
Author:  BGPenhollo Number:  22256 of 88063

Jnichols asked..

<<I'm looking to use some money from my Roth IRA to help with the down payment for my house. I know I can take the money I have contributed without penalty. What about money I rolled over from a previous employers 401k? I paid taxes on it already.....can I touch this money as well without penalty or no?>>

TMFPixy replied:
"I assume the 402k money is still in a traditional IRA. If so, the anwer is yes, you may take that money without penalty. However, you will owe ordinary income taxes on the withdrawal, and the maximum you may take is $10K in a lifetime. If the entire amount is not spent on the home purchase, then that part not so spent will receive the 10% penalty."

Hi Pixy,

I believe Jnichols was asking about using funds from a Roth IRA and I believe the sequence was roll-over from 401K to Trad IRA and then converted to Roth.

Let's see if I understand the Roth distribution rules. Contributions to a Roth are treated different from converted IRA's and gains. Contributions may be taken out of a Roth for any reason at any time without taxes or penalty. Converted IRA funds and gains can be removed tax-free and penalty free if the Roth is over 5 years AND you are 59 1/2 or older, which ever is longer.

I believe qualified distrubtions from a Roth (Tax free & penalty free) may be taken for Medical, Educational, and 1st time home purchase. I am unsure of the limitations for these distributions.

Is this essentially correct concerning distributions from a Roth?

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