Fellow Fools,Asking for a friend. He has a Roth IRA which was a traditional that was converted in 98. His wife still has a traditional.They are military and move around frequently. He bought a house in 97 and sold it in 00. Now he is moving and buying a new house. Question is can he use his or his wife's IRA to help make downpayment. Is the rule for using IRA limit them to the first house they ever buy or just use the IRA funds one time.Thanks in advance,c130king
in order to use an IRA for first time home purchase, one need not necessarily be a first-time home buyer. The rule, as I understand it, is that the individual and their spouse must not have owned a home as a principal residence during the two-year period ending on the date of acquisition of the new home.there is a $10,000 lifetime maximum, which I believe applies to the IRA owner, not the homebuyer---i.e.--the man and his wife could EACH take $10,000 from their IRA's.Also saw this on www.fairmark.com which may be of interest since you mentioned the military:The two-year period is extended in the case of certain individuals who sold a home and qualified for an extended rollover period because they serve in the armed forces or live overseas.but I couldn't find any other info on that.hope this helps'zila
one more thing:there's a five tax-year waiting period on withdrawl of funds from an IRA. since the IRA was converted in 98, that would mean no withdrawls until 2003 without penalties.
Is that 5 year waiting period only for Roth IRAs? Can he use his wife's traditional IRA without worrying about 5 year rule?Thanks,c130king
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