topic Can I withdraw IRA funds for a first time home purchase if I purchased the house earlier in the tax year? in Retirement tax questions

Can I withdraw IRA funds for a first time home purchase if I purchased the house earlier in the tax year?

mike_will8 — Thu, 06 Feb 2020 14:06:12 GMT

Re: Can I withdraw IRA funds for a first time home purchase if I purchased the house earlier in t...

HelenC12 — Thu, 06 Feb 2020 14:52:20 GMT

Yes, as long as it is in the same tax year and you are a qualified first-time home buyer.

The 10% early distribution penalty, on IRA's, has an exception for Qualified first-time home buyer distributions up to $10,000.

Per Schwab:

It applies to your very first home purchase, of course, but it also applies if you or your spouse haven't owned a principal residence at any time during the past two years.
The operating word here is 'principal', because even if you've owned a vacation home during that time, the exemption can still apply.
Also, you yourself don't have to be the homebuyer. You can also qualify for the exemption if you're helping your spouse, child, grandchild or parent buy a home.

Once you enter the distribution information from your 1099-R form, we'll help you check for any exceptions that could reduce the tax.

Re: Can I withdraw IRA funds for a first time home purchase if I purchased the house earlier in t...

dmertz — Thu, 06 Feb 2020 15:01:50 GMT

The IRS has never provided any clarification on this. The first-home exception only applies to a distribution used to acquire the first home. If you already own the home, it might be difficult to establish that a subsequent distribution was used to acquire the home.