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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
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