Message Font: Serif | Sans-Serif
No. of Recommendations: 0

I am in the process of purchasing my first home and am considering the use of IRA money for the downpayment. As I understand it, I am eligible as a first time buyer to take up to $10K out without the usual penalties. What are the tax implications of such a move? Since the money went in tax free, I assume I will have to pay tax on any money taken out. Is the money therefore simply treated as additional income and taxed at my usual marginal rate or is there some additional complication?

Thanks for your help.

- FreeFlyingFool
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.