Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< Is there a limit on the "first time home buyer" distribution from a Roth IRA? >>


To begin with, having looked at your subject (for a change), I want to caution you that a distribution from a Roth IRA for a first-time home purchase is not a "qualified distribution." For distributions to be "qualifed" (i.e., you pay no tax), you must be 59 1/2 AND the Roth must be at least 5 years old. So, if you're distribution is nonqualified, you will pay tax on any earnings (and possibly some contributions, if you're taking converted funds.)

The first-time home buyer exception is from the 10% premature distribution penalty, which will apply to anything beyond your Roth contributions. There is a $10,000 lifetime limit to such exclusions. You can read much more about the ordering rules, the special rules for conversions, and the home buyer exemption in the FAQ and IRS Publication 590.

Phil Marti
Print the post  


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.
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.
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.