Tax-Free IRA Distribution for Retirement Home?

Submitted by Jay Orman on Sun, 2012-06-10 18:21

Is it possible to take an IRA Distribution tax free if it is used as a required initial payment to a Retirement Home? In this case the retirement home is part of a CCRC (Continuing Care Retirement Community) and I would be entering in good health with no need for nursing assistance or nursing care.

Thanks,
Jay

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Permalink Submitted by mk foss on Sun, 2012-06-10 21:43

There are no tax-free retirement distributions. If the IRA has basis, part of the distribution could be tax free. Some CRCC payments are considered medical deductions so that you may have increased medical deductions in the year that you make the payment. Check with the CRCC and your tax advisor. The IRA distribution increases your adjusted gross income and has a negative effect on the medical expenses that can be deducted though.

Permalink Submitted by Jay Orman on Wed, 2012-06-20 00:20

Mary Kay Foss,

Thanks for the information.

Jay