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Level 2
June 1, 2019
Solved

My husband took money out of his IRA for a first time home purchase. Why is it taxing this withdrawal? We only took $5500 which is below the allowed limit.

  • June 1, 2019
  • 1 reply
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Best answer by null725
That use of IRA funds does NOT make the withdrawal non taxable. All it does is exempt you from the penalty for early withdrawal. The distribution remains fully taxable.

1 reply

null725Answer
Level 13
June 1, 2019
That use of IRA funds does NOT make the withdrawal non taxable. All it does is exempt you from the penalty for early withdrawal. The distribution remains fully taxable.
Level 2
June 1, 2019
I got that but the exemption is listed as none exempt.  Shouldn't it be exempt since it is?