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Hello and thank you for using Just Answer,If you take out form your IRA to purchase a first home you would be allowed to exclude the first $10,000 of the withdrawal from the 10% penalty that is imposed if you are under 59 1/2.
You can use the money for any purpose as long as the home is more than $10,000
You would use the Form 5329 to show the exclusion of the first $10,000 for the 10% penalty.
If you withdraw more than $10,000, the rest is still subject to the 10% penalty unless you can show another exclusion reason/.
So it actually can be used for new kitchen appliances, part of a mortgage payment, etc? We are purchasing a short sale and were told it would take 6 months or longer and we got approval in 3 months so the bonus we thought we would have for extra expenses we won't have yet.
Yes, as long as the actual price for the home is $10,000 or more.
Yes, it is. Do you know what the tax rate is, or does that depend on our tax bracket based upon our AGI?
It will be added to your income and so the rate will be dependent on your total income for the year.