I will be purchasing a home in January\February and using some of my traditional IRA funds as a down payment. I understand that I qualify under the 1st time home buyer clause to avoid the 10% early distribution penalty. Can I also use funds to replace the very old furnace and lay carpet in a room that just has sub-flooring right now? The wording in the tax code is very vague. It says it must be used for "qualifying acquisition costs", which are defined as
Costs of buying, building, or rebuilding a home.
Any usual or reasonable settlement, financing, or other closing costs.
The furnace was noted as being faulty in the home inspection and the room requiring carpet must be done before closing under an FHA loan.
