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Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience:  Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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I just took 55,000 from my IRA to purchsase a house. Is this

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I just took 55,000 from my IRA to purchsase a house. Is this a w/d that is taxable. I am 69 years old.

Shane-CPA :

Hello...my name is XXXXX XXXXX I am a Certified Public Accountant. I look forward to assisting you with your tax question.

Shane-CPA :

Is the IRA you took a withdrawal from a Traditional IRA or a Roth IRA?

Customer:

traditional

Shane-CPA :

okay...Do you know if you made any after-tax contributions to the traditional IRA in the past? Meaning any contributions that you did not receive a tax deduction?

Customer:

never have rec'd

Customer:

I have always paid the 10%

Customer:

not on this money, it was just given to me in May my pension

Shane-CPA :

okay...so the distribution is from your pension?

Customer:

yes

Customer:

are you there

Shane-CPA :

yes...sorry...preparing my response for you =)

Shane-CPA :

okay...then the distribution will be included as ordinary income on your tax return, however, since you are over the age of 59 1/2 you will not be subject to the early withdrawal penalty of 10%...

Customer:

i knew that, i understood that there is a one time where you do not pay for property

Shane-CPA :

There are some exceptions to the 10% penalty for certain retirement accounts...but that is only for the 10% penalty on early withdrawals. The income is generally always included in taxable income.

Shane-CPA :

"If you contributed after–tax dollars to your pension or annuity, your pension payments are partially taxable. You will not pay tax on the part of the payment that represents a return of the after–tax amount you paid. This amount is your cost in the plan or investment, and includes the amounts your employer contributed that were taxable to you when contributed. Partly taxable pensions are taxed under either the General Rule or the Simplified Method." (from IRS Tax Topic 410)

Customer:

that will take me to a different tax bracket. what all on the tax return can be deducted, taxes,lawyers????????

Customer:

I did not pay any part of pension

Shane-CPA :

So your employer contributed the funds into the pension. Generally funds contributed are reported on your W-2 as non-taxable. If you think that the employer contributed the money and included it in your earnings on your W-2, that portion or amount would not be taxable. However, you should confirm with your past employer if that was the case or look at the W-2's if you still have copies. You don't want to take that stance unless you are absolutely positive because the IRS can question it and if you can't substantiate it they will assess penalties and interest.

Shane-CPA :

If you itemize your deductions, using Schedule A, tax return preparation, lawyer fees, etc. can be included as a miscellaneous deduction.

Customer:

did not affect my w-2 b ackroom for years worked

Customer:

can you answer the question on closing of house what can i use as a deduction

Customer:

what will allow me to itemize, income or deductions

Shane-CPA :

Deductions in excess of your standard deduction allow you to itemize...as far as deductions related to the closing on the home...

Customer:

ok i guess i have the answer, I was hoping it was otherwise

Shane-CPA :

you can deduct loan origination fees that are expressed as points, pre-paid mortgage interest and pre-paid real estate taxes...

Customer:

can h&r block handle this or should I get a CPA

Shane-CPA :

H&R block should be able to handle this since it isn't a complex situation. You should receive a Form 1099-R at year-end with the amount of the distribution. Although you can consult with a CPA because sometimes the fees are similar to what H&R block charges...

Shane-CPA :

depending on the size of the CPA firm...

Customer:

thank you and have a nice day

Shane-CPA :

smaller firms are usually a little cheaper

Shane-CPA :

You're very welcome! Please let me know if I can assist you in the future. I hope you have a great day!

Customer:

need to print it

Shane-CPA :

okay...you should be able to print when I change the format of the chat feature...please also continue with a rating for our chat. As an expert, we are not compensated unless we receive positive feedback. Thank you again for allowing me to assist you.

Shane-CPA and 5 other Tax Specialists are ready to help you
Hi Joanne...This is Shane CPA from Just Answer. I assisted you with your question a few days ago. I wanted to follow up with you to see if my response has met your needs and if there are additional questions I can help you with.

Please let me know if I can be of service to you at any time!

I look forward to hearing from you!

Best Regards,
Shane, CPA