Hello folks
I'm in my mid thirties and thinking of withdrawing some money out of my Roth to buy a house. This home purchase would be my first house. I have question regarding the tax consequence on such withdrawal. What would the IRS do to all the gains that I have in that Roth? Do they treat these gains as income or as capital gains. Most of my gains are short-term.
My concern is that they'll treat these short-term transactions as income on top of the 10% penalty for early withdrawal and that I also have to pay the estimated tax as well.
Last but not least, someone has once told me that if the withdrawal is to buy a primary residence or to pay for some medical emergency...will not be penalized. Is this true?
Any help is greatly appreciated.
Kenneth88