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Does this strategy make any sense?

Can you take an early IRA distribution near year's end and use the tax owed to offset tax deductions such as mortgage interest,etc.......
pay it back in the following tax year, within the 60 day window to avoid the penalty?

It doesn't make any sense to me, but then maybe I don't understand what you're trying to accomplish.

If you take an early IRA distribution, you have cash in hand. You will owe tax on (part of/all) the distribution + 10% penalty on the taxable portion of the distribution. Tax deductions such as mortgage interest, etc. reduce the tax you owe.

So, tell me again, why do you want to do this?


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