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 Robin D. Your Own Question
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13136
Experience:  15years with H & R Block. Divisional leader, Instructor
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

Hello, I have had a simple ira account for the last 4 years.

Resolved Question:

I have had a simple ira account for the last 4 years. I now am purchasing my first home. However, I will be renting it out for 2 years before I move my family to live there myself. Will I still be able to escape the 10% early withdrawal penalty for closing my ira if I am renting it out for 2 years.
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Hello and thank you for using Just Answer.

Unfortunately as the property will not be your main home it will not qualify you to use the exception to exclude the 10% penalty from the early withdrawal. To use the exception the house would need to be your first time home and that means your main home. Also as you are using the property for rental it is an investment property and you will be required to file Schedule E to report your rental income and the expenses for the property.

I wish I could advise differently but the exceptions are rigid.

Robin D. and other Tax Specialists are ready to help you
Customer: replied 4 years ago.
I also only have a $15,000.00 annual salary and don't pay income tax. I am assuming this won't make any difference with the early withdrawal penalty? Thanks, Larry
Expert:  Robin D. replied 4 years ago.
No the penalty is only calculated on your actual distribution not your income level.

Related Tax Questions