Purchasing Investment Property With T. IRA
I have a traditional IRA and while I know I am able to withdraw 10,000 without incurring the %10 penalty I am wondering if I would be able to do this for a 4-Unit investment property. The stipulation that I keep seeing is that the purchase needs to be for a primary residence. If I purchase the property as an owner occupant I dont see how this wouldn’t be considered as my primary residence. Also does anyone know how long I would be required to live in the property before I would either move out or sell the property. Thanks for any input!
Permalink Submitted by mk foss on Thu, 2013-03-21 01:36
Your’re referring to the first time homebuyer exception from the 10% penalty. The home has to be purchased by the IRA owner, owner’s spouse, or an ancestor or dependent of the owner or spouse. To be a first time homebuyer you cannot have owned another principal residence for two years before the purchase. If you meet those requirements, the fact that you’ve purchased a mulit-family owner-occupied property shouldn’t be a problem. How long you must reside there is not specified in the 72t regulations but it seems that you must use it as your principal residence for a reasonable amount of time – I’d guess that a year to 18 months would seem reasonable.