How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Wendy Reed Your Own Question
Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
753989
Type Your Tax Question Here...
Wendy Reed is online now
A new question is answered every 9 seconds

MY HUSBAND DREW OUT HIS RETIREMENT FUND TO MAKE ...

Resolved Question:

MY HUSBAND DREW OUT HIS RETIREMENT FUND TO MAKE IMPROVEMENTS ON OUR HOME..CAN WE DEDUCT THAT AND WHERE?
Submitted: 8 years ago.
Category: Tax
Expert:  Wendy Reed replied 8 years ago.

Hello Lisa, welcome to Just Answer.

Improvements made to your residence are not deductible in the year that you make them. If they are capital improvements/additions/renovations, then the cost may be added to the basis of your home and may reduce any capital gain when you sell. If you use part of your home for business purpose, then the improvements may be partially deductible.

In addition, if you made any energy star improvements in 2007, such as windows, exterior doors, gas furnace, boiler, solar panels, insulation, then you may be eligible for the Residential Energy Credit.

Regarding the retirement funds distirbution, any pre-tax portion of his distribution will be taxable, and subject to the 10% early withdrawal penalty if he is under 59 1/2, unless a specific exception applies. There is no exception for home improvements.

Let me know if you need any additional information.

Wendy Reed and 2 other Tax Specialists are ready to help you