Yes, you can do both of those things. It is an interesting tax strategy.
There's no minimum time before you can take a distribution of money from a traditional IRA.
Yes, it will be included in the 5498. TurboTax and your broker will handle that, and it will be reported next year.
Yes, it is prior to the cutoff for last year. You have until April 15th
Note:
- You can use 401(k) funds to buy a home, either by taking a loan from the account or by withdrawing money from the account.
- A 401(k) loan is limited in size and must be repaid (with interest), but it does not incur income taxes or tax penalties.
- While a 401(k) withdrawal is technically unlimited, it is generally limited to the amount of the contributions you made to the account and can avoid penalties if it is classified as a hardship withdrawal, but it will incur income taxes.
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