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Can I borrow against an IRA to purchase a home?
I just received a small amount of money from my divorce that was taken from his IRA and put into an account in my name. I am in need of a place to live and am wondering if I could borrow some of this money to purchase a forclosed condo for my kids and I to live in? If I borrowed against it, and repay it, vs taking it out and keeping it, would I still be taxed and penalized for it?
3 Answers
- Wayne ZLv 71 decade agoFavorite Answer
No, you can not "borrow" from an IRA. Borrowing from an IRA is a prohibited transaction. Also, you can not use an IRA as collateral.
You can take a distribution. However, you would have to pay taxes on the distribution. There would also be a 10% if you are not a first time home buyer.
- petreLv 44 years ago
IRA's do no longer enable for loans. Any withdrawal would be subject to federal and state earnings tax. that's quite useful to ask your corporation in the journey that your 401k has a private loan provision. maximum do. some will aid you to borrow as much as $50,000 reckoning on your account stability. provided you pay the interior maximum loan back, that's no longer taxable.
