Re: 401K Withdrawal for First Home Down Payment ??
Re: 401K Withdrawal for First Home Down Payment ??
Source: http://newsgroups.derkeiler.com/Archive/Misc/misc.taxes/2007−11/msg00251.html
• From: "Paul Thomas, CPA"
• Date: Mon, 26 Nov 2007 11:38:05 −0500
wrote My wife and I are looking to buy our first home within the next couple of months. We both have plenty of money saved in our 401K accounts, but neither of us have IRA accounts. After doing some research I discovered that you cannot withdrawal from a 401K account (even for first time home purchase) without getting hit with a penalty. I also saw that you can take a tax free withdrawal from your IRA up to $10k for a first home purchase, tax−free. My question is can I rollover $10K from my 401K into an IRA and then withdrawal that money tax free for a down payment on our first home?
The problem is going to be rolling it from your employer sponsored 401K. They may limit when and under what circumstances you can take withdrawals, which is what this would be. See if you can borrow from the 401K − realizing that you have to pay it back or face taxes on that amount. Or, look toward other sources for your down payment. Borrow from a life insurance policy perhaps?
−− Paul A. Thomas, CPA Athens, Georgia
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