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How to use your IRA to make a cash offer...just don't miss this rollover window.
Can I use my IRA to make a cash offer on a house?Potentially, yes. But there's a strict 60-day window, and missing it can create a very expensive tax problem. Here’s what you need to know.In a competitive market, cash offers can be a huge advantage for the buyer. The challenge is that if most of your money is sitting in your IRA, you may not think you have access to it. At least not without having to pay a big tax bill. But you may have more options than you think.You may actually be able to take a distribution from an IRA, use it to close on the house, and then redeposit the full amount back into the IRA within 60 days under IRS rollover rules. If you meet all the requirements, the distribution generally isn't taxable (it’s like the withdrawal never happened from a tax perspective).But there's a real case worth knowing about. A taxpayer used this strategy to buy a home, ran into a delay on the other end, and missed the 60-day window by a matter of days. He asked the IRS for relief. The IRS said no. So his distribution became taxable, and if you’re under 59 ½ you might have additional penalties on top of that. Not good. That's why the timeline is so critical to get right and plan for.You also generally only get one of these 60-day IRA-to-IRA rollovers in any 12-month period, across all your IRAs combined. So this only works if you know exactly where the redeposit money is coming from before you ever touch the account.If you are thinking about using this strategy, you don’t want to wait to figure this out after you're already under contract. Map this out way ahead of time with your financial and tax advisors, so you know if it fits and what backup options you have if the timeline slips.Everyone’s situation is different. So if you're thinking about buying and want to understand your options before you make an offer, click the link in our bio.#HomeBuying#CashOffer#IRA#FinancialPlanning#RetirementPlanning#WealthManagement#SFCorps
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Securities and investment advisory services are offered through Osaic Wealth, Inc., member FINRA/SIPC and a registered investment advisor. Additional investment advisory services offered through Strategic Financial Advisors Corporation, a registered investment advisor. Strategic Financial Advisors Corporation and Strategic Financial Services Corporation are not affiliated with Osaic Wealth, Inc.
This communication is strictly intended for individuals residing in states where the contracted representative is licensed. No offers may be made or accepted from any resident outside the specific state(s) the representative is registered. Current registered states: AZ, CA, CO, CT, DE, FL, GA, KY, MD, NJ, NM, NY, NC, PA, SC, TN, TX, VA. Please contact us to determine the states in which each representative is registered.
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These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
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