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glw0211
Returning Member

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

Second Home purchase?
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7 Replies
MinhT1
Employee Tax Expert

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

The purchase of a home is not a tax reportable event.

 

If at closing you paid mortgage points, interest and prorated property taxes, you can deduct them in the Deductions & Credits section of TurboTax.

 

Other closing costs such as inspection fees, survey fees, escrow fees and transfer taxes are not deductible and are added to the cost basis of the home.

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glw0211
Returning Member

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

Please I took the money from my retirement to purchase the second home (Lake House) cash.  Somehow I feel that identifying how the withdrawal was spend holds some value.

MinhT1
Employee Tax Expert

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

Your retirement withdrawal is still taxable.

 

And purchasing a second home is not an exception to the 10% withdrawal penalty, so I you are under 59 1/2, you will be subject to the penalty.

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glw0211
Returning Member

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

 Please I took the money from my retirement to purchase the second home (Lake House) cash.  Somehow I feel that identifying how the withdrawal was spend holds some value.

glw0211
Returning Member

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

I am 69 years old

Is my $80,000.00 cash purchase for real estate able to be added somewhere?


@glw0211 wrote:

 Please I took the money from my retirement to purchase the second home (Lake House) cash.  Somehow I feel that identifying how the withdrawal was spend holds some value.


There are no exceptions to the 10% early withdrawal penalty for purchasing a second home.  If you are under the age for a penalty exception then the 10% penalty will be included on your federal tax return, Form 1040, as a tax liability.

The taxable portion of the withdrawal will be added to your tax return as ordinary income and taxed at your current tax rate.

Carl
Level 15

Is my $80,000.00 cash purchase for real estate able to be added somewhere?

Taking a withdrawal from a traditional IRA or 401(k) is a reportable event, no matter what. You will pay taxes on the withdrawal. If you are under retirement age, then in addition to taxes you will also pay a 10% early withdrawal penalty. What you use the money for has no impact on this. It's still taxable income and gets included in your overall AGI.

There are some exceptions for the penalty. But there are NO exceptions for the taxing of that withdrawal.

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