Exceptions to IRA distributions

[cathyan]

I thought I read somewhere that there is an exception to the penalty on early IRA distributions if if a homeowner was facing foreclosure.

I can't find anything on it, so did I really read that? Or was it only proposed? Or was I dreaming?

Any help appreciated!

[Cathy]

I thought I read somewhere that there is an exception to the penalty on early IRA distributions if if a homeowner was facing foreclosure.

I can't find anything on it, so did I really read that? Or was it only proposed? Or was I dreaming?

Any help appreciated!

Possibly you read that a withdrawal can be made from a 401(k) if a homeowner was facing foreclosure? That's one of the few technical reasons an active employee can make a withdrawal.

[RitaB]

Wow, for a minute there I thought cathyan was talking to herself, and answering back.

[cathyan]

Hey, I do that and sometimes get some very good answers! "Course, sometimes they're just nonsense.

[ILLMAS]

Possibly you read that a withdrawal can be made from a 401(k) if a homeowner was facing foreclosure? That's one of the few technical reasons an active employee can make a withdrawal.

How would I account for that, I have client that took out 25K to avoid foreclosure "dire situation" on his home?

[joanmcq]

You don't account for it. Its an early withdrawal. Period. He just gets the cash, doesn't get out of tax and penalty.

[Cathy]

joanmcq is correct. Taxable with penalty if no other exception applies. What I stated was merely an example of a reason a company can use to let an employee make an early withdrawal from a 401k.

RC....I have been known to answer myself a time or two...but normally not until April. :spaz: