IRA Withdrawl

Submitted by David Berdow on Fri, 2019-04-05 15:11

Someone I work with needs $30K on a short term basis (purchase of a new home before the existing one sells). The only source of funds is their IRA which is substantial. Is there a way to withdraw money from the IRA and place it back in the same IRA or another IRA within 60 days and not pay penalty and taxes on the withdraw?



Submitted by Alan - IRA critic on Fri, 2019-04-05 15:59

  • Yes, provided that the one permitted such rollover within a 12 month period has not already been used. This limit applies to all owned IRAs including TIRA and Roth. If a rollover is still available, the money can be used for up to 60 days and then rolled back to the same or different IRA.
  • That said, many people who attempt this with a real estate transaction fail to get the money back within 60 days. In that case, there will be no relief from the IRS, and the distribution will be subject to both tax and penalty. How does this person know his old home will sell that soon AND the transaction will not fall through or fail to close in time to replace the distribution?  I would convey a strong warning here. Perhaps the person should consider a contingency offer on the new house, even though that may reduce the chances of the offer being accepted.

Submitted by David Berdow on Sat, 2019-04-06 10:09

Understood. Thank you.

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