Expert: John Kirk, CPA Date: 7/30/2008 Subject: Traditional IRA premature withdrawal to buy first home
Question Hi
We(myself and spouse) have Traditional IRA Cd's. We contributed 4000 each for 2006 and 2007. As of now its in IRA CD with a bank. Now we are buying a home. Its our first home ever in US. I want to know can we use the IRA funds to contribute in the downpayment without any penalty?
Thanks a lot
Answer Yes, 1st time home buyers are allowed to receive a distribution from their IRA's for the purchase of their 1st home. However the amount of the distribution is limited to $10,000. And the closing cost and downpayment must exceed the amount distributed.
