Posted: 12/27/2011 6:20:17 AM EDT
| My friend bought a house in the last year and did use some of his retirement money for down payment on the house. He is aware of the amount needed to pay on his taxes and the 10% early withdrawl penalty. He did own his home but ex-wife kept the house. He hasn't been in the house for 5 years and they settled on payment of the house this year so that she could stay in it. Does the penalty still pertain to him? |
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You know this is ar15.com?
But if your friend took money out of a regular IRA or 401k/403b before retirement then he is subject to the tax and 10% penalty. It doesn't matter if he used it for a new house or cocaine. If it was a Roth IRA that he raided, there is the potential he could be ok and penalty free if he meets a few key requirements. When in doubt, the IRS is the Devil and you are screwed. Don't forget that. |
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Quoted:
You can avoid 10% penalty if you have not owned a house in 2 years..... Please show me where. My opinion, it's a taxable early distribution, though if his company made it available (which they're not required to) he could've qualified for a hardship withdrawal. |