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Author: lottie01 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121351  
Subject: Roth IRA & use for College Date: 6/10/2001 10:47 AM
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I am considering the use of Roth IRA money for college expenses for my daughter. This is converted Roth IRA money in its 4th year of spread out tax payment (year 2001). It is allowed to use this money with no penalty? Instead of spending it, could I borrow against it? Please advise.
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Author: gailkay One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51689 of 121351
Subject: Re: Roth IRA & use for College Date: 6/10/2001 11:46 AM
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I am considering the use of Roth IRA money for college expenses for my daughter. This is converted Roth IRA money in its 4th year of spread out tax payment (year 2001). It is allowed to use this money with no penalty? Instead of spending it, could I borrow against it? Please advise.

http://ftp.fedworld.gov/pub/irs-pdf/p590.pdf

Starting about Page 43.

Gail

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51692 of 121351
Subject: Re: Roth IRA & use for College Date: 6/10/2001 1:10 PM
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I am considering the use of Roth IRA money for college expenses for my daughter. This is converted Roth IRA money in its 4th year of spread out tax payment (year 2001). It is allowed to use this money with no penalty? Instead of spending it, could I borrow against it?

IRAs can never be used as collateral for loans.

Even after you've met the 5-year requirement in 2003, withdrawals for this purpose will not be "qualified" unless you also meet the 59 1/2 rule. You could withdraw earnings free of penalty, but not of tax. Withdrawals of your conversion and contribution (see the ordering rules in Pub 590) would be free of both tax and penalty.

Phil Marti
VITA Volunteer

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