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I earn $30,000 from a pension and social security benefits. I have an IRA and want to use it to purchase a new home that will be my homestead. However, I have discovered that the $72,000 the will be withdraw from my IRA would be considered income and would be combined with the $30,000 which would put me in the 28% tax bracket. Is there a tax benefit for purchasing a new homestead?
ANSWER
Expert Mark Anderson's Answer:
Yes. You need a place to live. If you own a home you get to deduct the interest and taxes paid to own the home. You could borrow the money to purchase the home. You could then use the payments from your retirement to pay the monthly payment on the loan. I hope this answers your question.
