Is a withdrawal from an IRA considered income if I used it for closing costs on a house?

[VolvoGirl]

From a Traditional IRA yes.  From a ROTH IRA no.   But you could have an exception to the 10% Early Withdrawal Penalty if you are under59 1/2.   

[Opus 17 · Accepted solution]

Withdrawals from a traditional IRA are always taxable income.  If you are under age 59-1/2, there is also a 10% penalty for early withdrawal.  If you qualify as a "first time home buyer", you can skip the 10% on up to $10,000 of withdrawal, but you still owe income tax, and you owe the penalty if you withdraw more than $10,000.

For this exception, "first time" home buyer means that in the past 2 years before the current purchase, you did not live in a home you owned.  (You could own rental property as long as you didn't live there.)