72t use to buy new house

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L1: 72t use to buy new houseI am 60 years old and have with used the 72t for 8 years. At this time there are many almost brand new properties to be bought for 100000 dollars. what are the penalties for pulling 100000 out of my account and buying one cash? These homes are foreclousures and short sales and work better with cash.2010-02-15 22:21, By: el dorado, IP: []
L2: 72t use to buy new houseEl Dorado,If you are already 60 years old and have had a 72t plan running for 8 years, then it should have been over once you reached age 59 1/2.Perhaps you just kept taking out the same amounts (as regular withdrawals) after passing age 59 1/2, which is fine. If this is all true,you can take out whatever you want from your IRA now with regular taxes being owed, but a large withdrawal from your IRA in one year canincrease your Federal tax rate. You may just want to increase the withdrawals enough to pay a new mortgage that you take out to buy one of these homes,so that you have enough tocover those mortgage and property tax payments, and not take a big hit in one year. Ken2010-02-15 23:18, By: Ken, IP: []

L2: 72t use to buy new houseKen makes a really good point -startby calculating your pre-tax distribution required to pay income tax and have $100,000 left – divide 100,000 by (1 – tax bracket) where the tax bracket is your combined federal and state income tax bracket. For exmple in a combined 30% tax bracket you would have to withdraw almost $143,000 to pay the tax and have $100,000 left – pretty expensive. Cash, from your IRA, may not be a really good alternative.2010-02-15 23:31, By: Gfw, IP: []

L2: 72t use to buy new houseThanks Ken and GFW. I had a idea that the taxes might be killer. Ken, your idea to increase the amount I take out yearly is great! I will probably pull out eneough to make the down payment, then increase my monthly check. I am planning to live in the new house and rent out my house. Gfw, thanks for the numbers. That really clarified it for me. Eldorado2010-02-16 00:39, By: el dorado, IP: []

L3: 72t use to buy new houseIf you have a signed agreement by 4/30, and settle by 7/1 or 7/31 ( I forget which), and have lived in your present house as your principal residence in 60 of the past 96 months ( 5 of 8 years), then you get a $ 6,500 tax credit from IRS, unless you are phased out by your income. Check with your tax preparer, if he isn’t too busy yet in tax season.2010-02-16 01:10, By: dlzallestaxes, IP: []