401 K Withdrawl Tax Free And Penalty Free For Property Purchase New Law Feb. 2012?

[taillefer]

Does anyone know if there was a new government law stating that you can withdrawl your 401 K to purchase a property land or home. Without paying taxes and penalties. Any help would greatly appreciated.

[osbourne]

Does anyone know if there was a new government law stating that you can withdrawl your 401 K to purchase a property land or home. Without paying taxes and penalties. Any help would greatly appreciated.

ROTFL

Pipe dream.

[ern]

No there is not. You may be able to get a loan instead of taking it out. The tax free is with an IRA.

[matyas]

No there isn't.

[eoforwic]

There is no new law , at 401 K Withdrawl Tax Free And Penalty Free For Property Purchase New Law Feb. 2012,,

[favian]

You have never been able to withdraw funds from a 401(k) tax free for ANY reason. Nor is there an exception to the penalty for the purchase of a first home. There are no proposed changes to the law on 401(k) withdrawals.

If you have an IRA you can take a penalty free distribution of up to $10,000 to purchase a first home, however the distro is still fully taxable as ordinary income. That does not apply to a 401(k) however.

You *might* be able to take a loan from a 401(k) to purchase a home. Not all plans permit loans so you will have to check with your plan to see if you can. My current job allows it but my last job did not. You now have up to 15 years to repay a loan form a 401(k) but you MUST remain with that employer until it's repaid in full. If you leave for ANY reason, any remaining balance becomes a taxable distribution if not repaid in no more than 60 days. Although 401(k) loans include interest, any interest paid goes back into your 401(k) account so you are effectively paying yourself interest on the loan.

[dureau]

again! no

[kenway]

Tax free, no.

Penalty free, maybe. If you can roll it into an IRA, and you're a first time home buyer, you can take out up to $10,000 for a down payment on your first home penalty free. You still have to pay tax though on the withdrawal.