Using IRA First Time Home Purchase Withdrawal for Remodel Work

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I have an opportunity to purchase a house that just needs some flooring, paint, and appliances to finish it up. It's been more than 2 years since I owned a home. I may pull some money from IRA using the first time home buyer exemption to avoid the 10% penalty tax. Is it possible to use those funds towards completing the remodel? I read a couple blogs that said it can be used towards building a house and remodeling but I can't find anything from the IRS specifically addressing this. Thanks for your help.

@Curtis Chism It has to be a home you'll occupy to avoid the penalty. Otherwise you could borrow from the IRA, up to 50% but not to exceed $50k, and use the money however you want.

@Ben F. @Curtis Chism

You absolutely CANNOT BORROW from an IRA. There are no loans on an IRA.

Other types of retirement plans, like 401(k), 403(b), etc., may allow for loans based on the plan document, but NOT an IRA.

Thanks guys. I am referring to taking a distribution not borrowing from the IRA. Can anyone refer me to an IRS publication that addresses this? When I was searching, the IRS website said to refer to PUB-A for early withdrawal rules. I went to that and it said to refer to PUB-B. I went to PUB-B and it said to refer to PUB-A! I found some blogs that said it can be used for building/remodel but I would like to see something in writing from the IRS. THANKS!

Originally posted by @Curtis Chism :

Thanks guys. I am referring to taking a distribution not borrowing from the IRA. Can anyone refer me to an IRS publication that addresses this? When I was searching, the IRS website said to refer to PUB-A for early withdrawal rules. I went to that and it said to refer to PUB-B. I went to PUB-B and it said to refer to PUB-A! I found some blogs that said it can be used for building/remodel but I would like to see something in writing from the IRS. THANKS!



1) You may be referring to 590-B. 

2) While it is possible to take funds from an IRA and not pay taxes or penalties provided that you return the funds within 60 days (60 day indirect rollover), keep in mind that the 60 deadline is strict and you can only do once per 12 month period for all IRA funds that you have.

3) Please note that you can use the proceeds of a 60 day indirect rollover for any purpose.