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I bought my first house last year (5/99) and didn't know I could withdraw money from an IRA for closing costs without paying a penalty. Can I still withdraw the money and reimburse myself for those closing cost or is it too late?
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Mike,

You should perhaps contact the IRS with this question, but it is my impression that it is too late. The way I understand it, you have 120 days to withdraw funds from the day you enter into the binding contract. Here's a link that may be of use:
http://www.irs.ustreas.gov/prod/forms_pubs/pubs/p5900107.htm

I myself don't think that this is bad news, however. If I were able to purchase the house without tapping into my tax-advantaged accounts, I'd leave the IRA alone, particularly if it's a Roth IRA or you would incur a big capital gains tax on your traditional IRA investments. I'd prefer to maintain my tax advantage and stay the course of retirement saving.

Fool on!
Brian
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<< I bought my first house last year (5/99) and didn't know I could withdraw money from an IRA for closing costs without paying a penalty. Can I still withdraw the money and reimburse myself for those closing cost or is it too late? >>

It's too late. The disbursement must predate the closing on the house.

Phil Marti
Tax Preparer
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Thanks for the information. When I originally applied for a loan I had a bank loan officer tell me I couldn't do it without the paying the penalties, so I didn't. I guess I'm better off anyway!
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