I bought a house 6 months ago. I've run out of money and I still have lots to fix, windows, backsplash, paint, etc.

From what I've read I believe I can take the first time home buyers $10,000 distribution from my IRA in order to pay for home improvement / home repairs for my first time home. My bank is happy to give me the 10k, just want to make sure I'm not going to owe a penalty at the end of the year.

  • 5
    You might be able to avoid the penalty, but you will definitely owe tax at your marginal tax rate.
    – D Stanley
    May 1, 2018 at 13:33

1 Answer 1


I've taken the requirements for the $10,000 IRA First time homebuyer distribution from IRS Publication 590-B:

  1. It must be used to pay qualified acquisition costs (defined next) before the close of the 120th day after the day you received it.
  2. It must be used to pay qualified acquisition costs for the main home of a first-time homebuyer (defined below) who is any of the following. a. Yourself. b. Your spouse. c. Your or your spouse's child. d. Your or your spouse's grandchild. e. Your or your spouse's parent or other ancestor.
  3. When added to all your prior qualified first-time homebuyer distributions, if any, total qualifying distributions can't be more than $10,000.

Qualified Acquisition Costs are outlined below:

Costs of buying, building, or rebuilding a home. Any usual or reasonable settlement, financing, or other closing costs.

Date of Acquisition

The date of acquisition is the date that you enter into a binding contract to buy the main home for which the distribution is being used

Home improvement and repairs are not defined as a qualifying expense and the home purchase was more than 120 days ago. It does not appear that you qualify for the IRA distribution without penalty.

If this is a Roth IRA, you are allowed to withdraw your contributions at any time without penalty.

  • Thanks. Your answer makes sense and I accepted. However, the part about "If this is a Roth IRA, you are allowed to withdraw your contributions at any time without penalty." is incorrect. There is a 10% penalty on any Roth IRA distributions unless you satisfy certain requirements. See rothira.com/taking-early-withdrawals-your-roth-ira May 3, 2018 at 17:15
  • 2
    You are confusing contributions with earnings. In a Roth, since contributions are already taxed you are able to withdrawal contributions anytime. If you try and withdrawal earnings, you will be subject to various requirements in order to avoid penalties. From your link: "Contributions are the funds that you deposit into your Roth IRA. Because your contributions are always made with after-tax dollars (you already paid income tax on that money), you can withdraw your contributions before retirement without having to fork over cash for taxes or penalties."
    – rpmw_1991
    May 3, 2018 at 17:21
  • Thank you for that clarification. That means I can get to money I need without penalty. Imn123 you made my day! May 15, 2018 at 0:22

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