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: 15037
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

If I take an IRA withdrawal for my first home, can I use part

This answer was rated:

If I take an IRA withdrawal for my first home, can I use part of the money for repairs/expenses/appliances to move in, or just for closing and attorney fees? What about part of the first month mortgage if short because of moving expenses? And do these expenses get itemized on my tax return? How detailed should the records be for the 120 day period?

Robin D. :

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.

Robin D. :

You can use the money for any purpose as long as the home is more than $10,000

Robin D. :

You would use the Form 5329 to show the exclusion of the first $10,000 for the 10% penalty.

Robin D. :

If you withdraw more than $10,000, the rest is still subject to the 10% penalty unless you can show another exclusion reason/.

Customer:

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.

Robin D. :

Yes, as long as the actual price for the home is $10,000 or more.

Customer:

Yes, it is. Do you know what the tax rate is, or does that depend on our tax bracket based upon our AGI?

Robin D. :

It will be added to your income and so the rate will be dependent on your total income for the year.

Customer:

Great, thanks!

Robin D. and other Tax Specialists are ready to help you