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Can I use payoff of my 1st home for reason on drawing from my IRA retirement? I received a 1099-r

I was hoping I could avoid the penalty on the $20,000 that was drawn out of my IRA account last year. I used that money to pay off my house (first home).  Was hoping to use the "purchase first home" reason.

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Can I use payoff of my 1st home for reason on drawing from my IRA retirement? I received a 1099-r

No, you cannot use payoff as  "purchase first home" exception to the additional 10% tax penalty. A payoff is not the same as purchase.  Per IRS, you have to close on home within 120 days of taking money out of IRA to qualify for this exception.  

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Highlighted
Level 9

Can I use payoff of my 1st home for reason on drawing from my IRA retirement? I received a 1099-r

No, you cannot use payoff as  "purchase first home" exception to the additional 10% tax penalty. A payoff is not the same as purchase.  Per IRS, you have to close on home within 120 days of taking money out of IRA to qualify for this exception.  

View solution in original post