i withdrew 401k account to buy a bigger house as my family grew. would this distribution qualify for any tax deductions and reduced penalty? i didn't sell my first house.

[sampath-ramkumar]

if i see the previous house, i won't be able to buy it at the price i purchased back in 2018, so i withdrew my 401k and bought bigger home to accomodate need.

[fanfare]

Assuming you are under age 59 1/2 there is tax on your distribution and another 10% penalty for invading your 401k early.

@sampath-ramkumar 

[dmertz]

As fanfare indicated, using the money to buy a second house has no bearing on the tax consequences of having received the 401(k) distribution.