USA Traditional IRA for home purchase

[Proj1423]

Hi. I'm buying a house, primary residence, and would like to withdraw the max 10k to avoid the penalty. I'm not a first time buyer but I haven't owned a home in about ten years. What is the definition of first time buyer? Also, if I take the money out and it's getting close to 120 days without a closing, can I add that money back into a traditional IRA to avoid the penalty?

 

[kirby]

https://www.irs.gov/pub/irs-pdf/p590b.pdf

Read page 24 of IRS publication 590b as to who is a first time homebuyer.

I suggest you ask the financial institution where your IRA is held if you can put the funds back in to avoid penalty.

 

[Proj1423]

Thank you. The question is more about whether the irs will penalize me 10% if I return the money or open a different traditional IRA with the money prior to the end of the 120 days.

 

[kirby]

This source says no penalty

Using an IRA to Make a House Down Payment as First-Time Buyer

Learn about the rules for using an IRA for a house down payment.

www.nolo.com

Also, IRS states this - see bottom of IRS pub 590B page 24 left column

But still verify in writing with your IRA provider that they can do this correctly, just to be safe.

 

[Proj1423]

Exactly what I was looking for! Thanks!

 

[Werner Reisacher]

Time limit for re-investment of IRA distributions is 60 days.