Ask Terry Questions Gifting money from an IRA or 401K

Gifting money from an IRA or 401K

By Terry Savage on February 03, 2023 | Housing / Real Estate

I would like to gift my son money from my IRA or 401K for the purchase of his new home. Can I do this without being taxed?

Terry Says

No, this strategy won’t work for you. First time homebuyers get a hardship exemption — and even so, it’s tough to avoid penalties. Read this article:

And if you have to borrow from your OWN retirement plan to help your son, it is not a good idea. He won’t be likely to support you when you run out of money in retirement. So keep your money, and make him the beneficiary — if there is any left over.

I know you love him — but the rule is the same as on the airplane: Put your mask on first, then help others!



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