First Time Home Buyer IRA Exemption

2 Replies

I am 6-8 months out from buying a small multi family to house hack for my wife and I’s first property. We currently index invest a strong portion of what we have saved up.

2 questions.

- Is it worth it to invest inside of an IRA in order to get the tax deferred gains?

- If the loan on our first property was only on my name but my wife lived in it. Would an IRA that my wife has be eligible for an IRA first time home buyer exemption on technically our second property. However the first with her name on it?

Updated about 3 years ago

In question one I am referring to if it’s worth it to invest in an IRA for a first time home purchase by using the first time home exemption?

@Collin Baumann

Unless I am missing something - the IRA can't purchase the personal residence.
You can withdraw $10,000 from your IRA and use it to acquire the personal residence.
The $10,000 withdrawn will not be subject to the 10% penalty.

Originally posted by @Basit Siddiqi :

@Collin Baumann

Unless I am missing something - the IRA can't purchase the personal residence.
You can withdraw $10,000 from your IRA and use it to acquire the personal residence.
The $10,000 withdrawn will not be subject to the 10% penalty.

You’re right, and that’s what I was referring to. I was confused on whether or not it would be a tax advantage but it wouldn’t because by using the exemption although you won’t get taxed with the penalty it will be taxed as income which would be higher then the capital gains tax in a standard brokerage account. I feel like a fool. Haha my bad.