1. Headline
  1. Headline
By John W. Schoen Senior Producer
msnbc.com
updated 3/10/2005 8:29:05 PM ET 2005-03-11T01:29:05

Q: Can I cash out my IRA’s to put down on a house? —Pete P., Portland, Ore.

  1. Stories from
    1. Obsessed or Hot Mess? Vote on Keira's Mismatched Shirt, Rihanna's Giant Jeans & More
    2. Angelina Jolie Visits Britain's House of Lords
    3. Darren Wilson: Who Is the Man at the Center of the Ferguson Shooting?
    4. How Benedict Cumberbatch Really Feels About His Female Fans
    5. 15 Powerful Images from Last Night's Ferguson Demonstrations

A: You can, but there are a few hoops you have to jump through to keep the IRS happy.

First of all, you can only do this if you’re a “first time” home buyer. (In IRS-speak, that means you haven’t owned a home in two years. If you’re married, same goes for your wife.)

Next, you can only use $10,000 of IRA savings. If you’re married and your wife has an IRA, she can use another $10,000 from her savings. You also have to use the money within 6 months of withdrawing it. And you can do this only once.

Oh, and you’ll have to pay taxes on any gains form the investments that were held in the IRA.

If you don’t meet these criteria, or you want to withdraw more than $10,000, you can still use the money. But you’ll have to pay a 10 percent penalty for “early withdrawal.” For more information refer to Publication 590, page 29. (It’s a pdf file, so make sure you have Acrobat reader before downloading.)

© 2013 msnbc.com Reprints

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

More on TODAY.com

  1. Caters News Agency

    Snuggle buddies! Baby girl, baby sloth cozy up for maximum cuteness

    11/25/2014 10:18:17 PM +00:00 2014-11-25T22:18:17
  1. Jennifer Skinner

    This 4-year-old's love letter to school crush is the cutest thing ever

    11/25/2014 6:50:23 PM +00:00 2014-11-25T18:50:23
  1. Traveling for Thanksgiving? Leave now.

    11/25/2014 5:49:26 PM +00:00 2014-11-25T17:49:26
  1. 9News

    Mom dies during childbirth to save 'miracle' baby's life

    11/25/2014 3:32:54 PM +00:00 2014-11-25T15:32:54
Exclusive
  1. Angelina Jolie reveals how marriage has changed life with Brad Pitt

    11/25/2014 2:00:39 PM +00:00 2014-11-25T14:00:39