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I am looking to liquidate part of my Traditional IRA and possibly

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my ROTH IRA to make...
I am looking to liquidate part of my Traditional IRA and possibly my ROTH IRA to make a first time home purchase in NY. I will not be on the mortgage but I am on the contract and I will be on the deed at closing. I have the max amount of $10,000 available to take out for the Traditional IRA and I have $900 available in my Roth IRA. Also for both accounts I have opened OptionsHouse accounts in February of this year but I had them transferred from a Scottrade Traditional IRA account created 9/4/12 and a Scottrade ROTH IRA account created in 4/28/05. The funds in the Scottrade Traditional IRA were originally transferred from a CIRS 401K and a TIAA CREF 401K on 9/4/12. My question is will I be hit with any fees for early withdrawal for a first home purchase and will I also owe any taxes on the withdrawn money? Can I use this money towards closing costs, and attorney fees, or just for the down payment? Thank you in advance for your help.

- Jason
Submitted: 4 years ago.Category: Tax
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Answered in 17 minutes by:
10/14/2013
Tax Professional: Stephen G., Sr Income Tax Expert replied 4 years ago
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7,240
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Stephen G. :

Hello, my name isXXXXX & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.

Stephen G. :

I presume you are under 59 1/2.

Stephen G. :

You should be ok as far as the $10,000. is concerned as long as it is used for a first time home purchase. There will be no 10% early withdrawal penalty; however, it will be subject to income taxes as the $10,000. will be added to your taxable income for the year of withdrawal.

Stephen G. :

As far as the $900. is concerned you are always able to withdraw your own contributions so if you have made at least that much in contributions (money that has been taxed going in), that shouldn't be a problem; however, if at all possible I would leave the money in your Roth IRA if possible.

Stephen G. :

As far as what expenditures qualify for the first time home purchase goes, the expenditures you mention would be fine, although once the money comes out of the IRA what precisely you use those exact funds for isn't important as long as you expend at least that amount for your first time home purchase.

Stephen G. :

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