I am turning 70. My wife and I still work, and own our home. We would like to buy a condo in Hawaii as an investment. What are the tax consequences of cashing in a regular IRA to use as the down payment of 75K.
Terry Says: Since the condo is for your personal use, you cannot buy it inside your IRA. If you take the money out, you will pay ordinary income taxes on the money at your marginal tax rate. And you’ll lose all future tax-deferred growth of the money. Only you know if this is a good idea, and it depends on how much you have in the way of other assets, and your expected longevity. You say it is an investment, but I suspect you’ve been through a tough winter and don’t want to do it again! And I don’t blame you! But, maybe you would be better off renting?