Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I just read in IRS Pub 590 (2008) that IRA withdrawals are penalty free up to $10,000 when used for the purchase of a first time home for yourself, your spouse, your child, grandchild, or parent. My wife and I have often discussed helping our children buy their first homes and it is one of our investing objectives. My question is: is the $10,000 limit per homebuyer? We have 2 children. Could my wife and I both withdraw $10,000 each for each child to buy their first home when the time comes (a total of $40,000)? When we bought our first home ten years ago I withdrew $2500 from my IRA for closing costs. Pub 590 states that "when added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions cannot be more than $10,000." Is that a lifetime max per IRA holder? Or a lifetime max per homebuyer? A lifetime max seems strange since a first time homebuyer is defined as someone who hasn't owned a home in the past 2 years. When my 8 year old is ready to buy a house, will the IRS still have records of my home buyer withdrawal 25 years prior and will it limit what I can give him?
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement