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Topic : Avoiding 10% Penalty on pre 59 1/2 IRA ...

Sent to Tax Experts October 23 2006 at 7:07 PM
   

Topic : Avoiding 10% Penalty on pre 59 1/2 IRA distributions, please

Question: Pub 560 says withdrawals for education not subject to 10% penalty.

Would this exclusion include expenses to repay student loans from a Masters program?

Thank you, Mike Ancona    FeeOXXXXX@XXXXXX.XXX

 

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FANWOOD, New Jersey

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October 23 2006 at 7:33 PM (25 minutes and 53 seconds later)
         
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According to IRS publication 590 page 49 - http://www.irs.gov/pub/irs-pdf/p590.pdf - The distributions are not more than your qualified higher education expenses are excepted from 10% penalty.

Qualified higher education expenses are tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a student at an eligible educational institution. - page 50 - it doesn't include student loan repayment.

Therefore, student loan repayment is not a valid exception for early withdrawal penalty.



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