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For a Traditional IRA the $10,000 exclusion is for First Time Home Purchase. If you are over 59 1/2 you can withdraw for any reason without a penalty however the withdrawal will be taxed as ordinary income. See link below-
Note: If you withdrew the money due to a COVID related issue and you are under 59 1/2 the penalty would be waived and you would have the option to spread the tax over a three year period.
You do not have to test positive for COVID but be financially impacted by COVID-19 for you or anyone in your house hold. See link below-
-follow these link(s) for additional information-
Retirement Topics Tax on Early Distributions | Internal ...
2020 Stimulus: Tax Relief for This Year's Taxes - TurboTax ...
@kshickora wrote:
I used all of the IRA money towards my new home. When I purchased my first home 7 years ago, I did not use the IRA money towards the purchase. Can I use the $10,000 limit towards the purchase of my new home?
No - it is not your first home if you had a home from 7 years ago within the past two years.
Per IRS Pub 590-B
https://www.irs.gov/publications/p590b#en_US_2020_publink1000230922
First-time homebuyer.
Generally, you are a first-time homebuyer if you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse must also meet this no-ownership requirement.
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