roth distribution
If I purchase a house via my roth ira (and have not lived in it), then at 60 yrs old and having the roth for over 5 years, can I take title to the house and live there witout paying taxes on it or any other fees to the IRS ?
Similiar situation but with a trad ira.
Thx’s
Frank
Permalink Submitted by Edward Czapor on Mon, 2010-03-15 21:33
If you mean you are going to purchase a home you will not live in with a Roth withdrawal then you can withdraw up to the amounts contributed tax and penalty free even if under 591/5. If any earnings are withdrawn which come out last, they would be taxed and penalized if under 591/2. With a traditional IRA having no basis (non-deducted contributins), then the entire distribution would be taxed and also subject to penalty if under 591/2.
Permalink Submitted by Frank on Mon, 2010-03-15 23:53
I apologizse for no being clear.
If real estate was purchased FBO as an asset in my Roth, I do not live in it. Then at 60 yrs old and having the Roth for more than 5 ys I decide to take the house (dded to myself) as a distribution, are there any taxes due , or is it considered a non taxabe distribution ?
Thx’s
Frank
Permalink Submitted by Alan Spross on Tue, 2010-03-16 00:15
A distribution of any property from your Roth after the Roth is qualified is tax free. Your Roth is qualified under the conditions you posted. As long as you first do the distribution at appraised market value, this should not be a prohibited transaction. You could then use the house personally, but only after it was fully distributed from your Roth.