tax-free distribution for purchase of residence at age 66
Can a client age 66 or older take a tax-free distribution from an IRA and/or 401(k) to purchase a permanent residence? I’ve had two clients call me indicating they heard this was doable and is not related to the $10K distribution for a first time home buyer.
Permalink Submitted by Denise Appleby on Wed, 2012-05-30 16:50
[quote=”[email protected]“]Can a client age 66 or older take a tax-free distribution from an IRA and/or 401(k) to purchase a permanent residence? I’ve had two clients call me indicating they heard this was doable and is not related to the $10K distribution for a first time home buyer.[/quote]
No. If the 401(k) plan allows loans, they can take a loan from the vested 401(k) balance for that purpose. [u]Generally [/u]limited to a mazimum of 50% of the vested account balance or $50,000, whichever is less.