is there such a thing as 120 days after distribution from .
my client wants to take 10,000.00 out for building a house from his IRA but might not need the money. I Know about the 60 days and the rollover over back into the IRA as long as there is not another indirect rollover going back 12 months.
But do you know anything about 120 days in reference to a distribution out of an IRA for the purpose of a house.
Permalink Submitted by Alan Spross on Thu, 2010-11-18 21:26
Yes.
If the client qualifies as a first home buyer, he gets a life time penalty exception of 10,000. He must use the 10,000 for qualified expenses within 120 days of receiving the IRA distribution. However, if he takes the distribution and the deal falls through, he also has 120 days to roll the funds back to the IRA. And this second part appears no where in Pub 590!