Question

I'm a 1st time home buyer, 34 if I pull from contributions on roll over IRA from prior employers 401K is it subject to 10% penalty?

Forum|Forum|5 years ago
December 13, 2020
2 replies
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I have $97K in an IRA that was from a roll over of a employer plan. I have contributed 77K an the rest is earnings. I'm seeing if I will be penalized for pulling 60K from my plan which would be within the contribution amount.

TurboTax Online

B

Bsch4477

Employee

If you qualify as a first-time home buyer, you can withdraw up to $10,000 from your IRA to use as a down payment (or to help build a home) without having to pay the 10% early withdrawal penalty. However, you'll still have to pay regular income tax on the withdrawal.

Assuming that you had a traditional 401-k you were not taxed on the contributions that you made so any withdrawals from your IRA would be subject to regular income tax.

macuser_22

Employee

Assuming that you mean a Traditional IRA that the 401(k) was rolled into and not a Roth conversion, then your contributions make no difference. Any distribution is taxable income but if used for a 1st home then up to $10,000 would not be subject to the additional 10% penalty - see:

https://www.irs.gov/publications/p590b#en_US_2019_publink1000230922

**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.**