Loan on IRA

[bekzm]

If I remember right a loan against an IRA - you could not do it in 2010. But a loan officer at a bank told a client that he thought it changed and cannot find where you can borrow against your IRA at a bank - not through and employer - this was rolled over from a 401(k) when he quit his job and became self employed. He did not pay taxes on it so if he pulls it out - yes it could be taxed.

But he told them which they want to buy another house now and have to put a down payment on it but pay it back when there house sells and if the crystal ball would work on the 60 day sell of the house - then yes - I could see it. So is there a change to borrow against your IRA and may run over the 60 days.

Can anyone help?

2011 - is it starting out a good year....

[ChEAr$]

If I remember right a loan against an IRA - you could not do it in 2010. But a loan officer at a bank told a client that he thought it changed and cannot find where you can borrow against your IRA at a bank - not through and employer - this was rolled over from a 401(k) when he quit his job and became self employed. He did not pay taxes on it so if he pulls it out - yes it could be taxed.

But he told them which they want to buy another house now and have to put a down payment on it but pay it back when there house sells and if the crystal ball would work on the 60 day sell of the house - then yes - I could see it. So is there a change to borrow against your IRA and may run over the 60 days.

Can anyone help?

2011 - is it starting out a good year....

The law has not changed. One may not use an IRA as security for a loan.

However, a 60 day rollover is a possibility in that the amount withdrawn must be rolled over within that time frame to a different IRA. But if client is depending on sale of former house within 60 days, ...... well..... you get the drift.

[bekzm]

Thanks

Thank you for verifying the information. It is when a banker or someone thinks the laws have changed and you can't verify it or find it in writing to show them it has or has not.
So thanks again - there are good people out there to listen and help when you about to give up.

[taxmom34]

but

if the house does not sell in the 60 days, the distribution would be taxable but up to $10,000 would not be subject to the 10% penalty

[Jesse]

if the house does not sell in the 60 days, the distribution would be taxable but up to $10,000 would not be subject to the 10% penalty

The $10,000 exclusion is for first time home buyers.

[taxmom34]

sorry, my bad!