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dfussell
New Member

Roth IRA withdrawal for first time homebuyer

Hi, I know this isn't exactly a moving question, but I have been struggling with this issue, and any help would be greatly appreciated.

 

 I'm trying to figure out whether I can replace funds withdrawn from a Roth IRA for a first time home purchase. On IRS Publication 590B (2020), I see this statement, "If you received a distribution to buy, build, or rebuild a first home and the purchase or construction was canceled or delayed, you could generally contribute the amount of the distribution to an IRA within 120 days of the distribution and not pay income tax or the 10% additional tax on early distributions. This contribution is treated as a rollover contribution to the IRA". My purchase was not canceled or delayed, but I was given money so that I did not need to use my IRA money for the purchase. I'm looking for advice on whether and how I can replace the money as it's outside of the 60-day window but within 120 days of the withdrawal.

 

Thank you

4 Replies
macuser_22
Level 15

Roth IRA withdrawal for first time homebuyer

If the purchase was completed withing the 120 days then it was not delayed or cancelled.  It does not apply to simply not needing the money for other reasons.   You could have done a rollover within 60 days of the distribution.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
dfussell
New Member

Roth IRA withdrawal for first time homebuyer

OK, thank you.  That makes sense.

JoeD_CPA_CFP
Employee Tax & Finance Expert

Roth IRA withdrawal for first time homebuyer

Hi,

 

It appears you do not qualify to put the money back within the rollover period or the delay exception period. However, if you have not made your ROTH IRA contribution for 2021 you could contribute up to the maximum amount allowable (assuming you have enough income). Reply to this if you need clarification or additional information.

 

Here is the IRS link to see if you qualify, click here.

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laneyhenslee
Level 2

Roth IRA withdrawal for first time homebuyer

Thank you

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