Buy a house in the U.S. with Roth IRA

First-time house buyer

The U.S. government has made a pension plan and expects that taxpayers will have enough money after retired, so a 10% penalty by withdrawal under 59.5 years old from traditional IRA.

But if you're going to make a big payment in your life, such as buying a house, the pension plan has a design-adapted arm, and before you go down there' is a first-time home buyer's definition in this article: First-time home buyer refers to either of the first-time taxpayers or two people who have not held any of the property rights in the last two years.

This condition is actually relatively loose, for example, the taxpayer owned the house five years ago, but has not held the house since, because it fits: not held in the last two years, still applies: First-time homebuyer's

The Traditional IRA

The money raised into the IRA is TaxBefore, and dividends/capitals generated within the TSA have not yet paid taxes, which is the concept of before-tax, so when it comes to the first-time homebuyers' exmption

Taxpayer/Spouse each has a $10,000 withdrawal limit, which will not be 10% of the penalty, but will still be included in the current year's taxable tax

When the year will receive 1099-R, box 7's code section will be 1, if you receive the code does not remember to contact the unit sent to their own 1099-R correction, otherwise the code in tax filing will lead to a different tax event (box 7 code is different, in the tax filing software or turbotax will have different calculation methods)

Important limitations

Although the first-time homebuyer's restrictions are relatively lenient, it can only be used once in a lifetime, and cannot be reused even if you change to a different HistoriAS account.

Roth IRA

Principal: The transfer of money into the Roth IRA is the concept of after-tax, because she did not enjoy any tax deduction benefits when he entered the Roth IRA, so there is no penalty whenever you withdraw the "principal" portion of the Roth IRA

Value-added amounts such as dividends/capital gains in Roth IRA are divided into two conditions if the first-time homebuyers are eligible (neither of the following amounts contains the original contributions part)

Five years after the first withdrawal of a Roth IRA account, you will be entitled to a $10,000 allowance and a penalty-free limit

Less than five years after the first withdrawal of a Roth IRA account, the $10,000 limit is included in the taxable tax for the current year, but there is no Penalty.