Profile picture for user8085885

Is there a tax protection when using Trad IRA (VA) to purchase a primary residence (CA)?

We are over 65, and are purchasing a home in California. We are liquidating my husband's Traditional IRA acct in Virginia (IRA acct office in MD) to wire directly to the escrow company (CA) toward this purchase. Is there a way to avoid the tax issue of liquidating a traditional IRA toward a home purchase in California? This will be our primary residence.

Our income will fall into the 15% category for taxes this year, without reporting the money in the IRA, but jump into the next category if this transferred amount is recorded as income.
  • November 05 2012 - Fallbrook
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (2)

Profile picture for ChristopherLee3
You will have no penalty of early withdrawal . The traditional IRA money has never been taxed so it will be taxed.


Chris
Owner Cel Financial Services  
IRS Registered Tax Return Preparer
Registered bonded California CTEC Tax Preparer 
[deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
  • November 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for wetdawgs
Please talk with your tax professional.     The IRA section at the IRS website (link) suggests all distributions are taxable if the contribution were pre-tax contributions.    After 59 1/2 one doesn't have to pay the 10% penalty, just the regular income tax.







  • November 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.