I am leaving my current job and will be starting a new job soon. I want to use $10k of my 401k savings as a down payment on a 2-4 unit building that I plan on living in for a year.
Can I use any IRA company to do this? Do I need to have a CPA help me with this or can I just do it myself? Also if I use this money to make the down payment am I required to stay in the place for at least one year?
You cannot use an IRA to make a down payment on a property you intend to live in personally or fund the balance of the transaction personally.
You can take a distribution from your IRA and avoid the 10% penalty for early distribution if the funds are used for the purpose of a primary residence. You should speak with your CPA to ensure you do that correctly.
Yes I was curious about the distribution from the IRA to avoid the 10% penalty.
Thanks for the link
Since you are leaving your job and have an opportunity to transfer your 401k to another structure, I will add that if you are self-employed, you may be eligible for a Solo 401k which would allow you to borrow the money needed for a downpayment. This would keep your retirement funds in tact instead of taking a distribution from an IRA.
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