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New Member

Capital gains on retirement distribution

I received a lump sum retirement distribution in 2021, and looking to offset my tax liability. Can I do that if I invest in a house purchase?
2 Replies
Level 15

Capital gains on retirement distribution

The purchase of a personal residence is not reported on a tax return.  Only the mortgage interest paid, property taxes paid, mortgage insurance paid (if applicable) and the points paid on a new loan are deductible as itemized deductions on Schedule A.

Level 15

Capital gains on retirement distribution

The taxable amount from a retirement fund distribution is not a capital gain.  It is entered on your tax return as ordinary income and taxed at your current tax rate.  If you were under age of 59 1/2 or under age 55 during the year you separated from the employer then there will be a 10% early distribution penalty assessed on the gross distribution and entered on the return as a tax liability. 

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