Posted on: 25th Jun, 2010 06:41 am
Hi,
I've spent the last 5 years in graduate school. My wife and I are moving to another in the processing of buying our first home. We've been pre-qualified for a mortgage and are in the process of house shopping. We plan to put at least 3.5% down. To do so, we are going to roll my wife's 403b over into an IRA and then use the first time home buyers exception to obtain the funds. The problem is we do not have access to those funds before her employment ends, but we want to close on the house before that occurs. Our lender suggested obtaining a gift from a relative for the time being and then using the IRA to pay the relative back. My questions are:
-Does paying back a gift qualify as an "acquisition cost?"
-How do we prove the funds were used for buying a home? Is there a form we fill out, do we need to provide some sort documents to the IRS or IRA manager?
Thanks in advance!
I've spent the last 5 years in graduate school. My wife and I are moving to another in the processing of buying our first home. We've been pre-qualified for a mortgage and are in the process of house shopping. We plan to put at least 3.5% down. To do so, we are going to roll my wife's 403b over into an IRA and then use the first time home buyers exception to obtain the funds. The problem is we do not have access to those funds before her employment ends, but we want to close on the house before that occurs. Our lender suggested obtaining a gift from a relative for the time being and then using the IRA to pay the relative back. My questions are:
-Does paying back a gift qualify as an "acquisition cost?"
-How do we prove the funds were used for buying a home? Is there a form we fill out, do we need to provide some sort documents to the IRS or IRA manager?
Thanks in advance!
All IRAlans have their own rules and guidelines. We do not know the specific IRA guidelines for your specific IRA plan. There is no blanket answer to your question.
Obviously, your question is whether or not paying back a gift is considered by your IRA plan as an "acquisiton cost" since the gift was used to purchase a house. Ask your plan administrator. We can not answer for them.
Good luck. Hope you get the correct answer.
Obviously, your question is whether or not paying back a gift is considered by your IRA plan as an "acquisiton cost" since the gift was used to purchase a house. Ask your plan administrator. We can not answer for them.
Good luck. Hope you get the correct answer.
John's full of wisdom - your plan administrator needs to adjudicate this. Lenders are not provided with the type of answers to your questions that you require here.
