Did you know there are several ways to take money out of your IRA tax-free? Remember, just because you CAN, doesn’t mean you SHOULD.
The first thing you should do is consult your tax/legal/financial advisor(s) and determine if taking money out of your IRA is the right step for you!
Option 2: Capital losses.
Many investors have unrealized capital losses. Ask your advisor to determine the basis of each of your investments and find out whether or not they have any unrealized capital losses. Please remember that only $3,000 of net capital losses can be usually taken on an income tax return. However, the additional capital losses can sometimes be carried forward to future years. This $3,000 loss can offset a $3,000 distribution from an IRA, making the distribution from the IRA income tax-free!
Everyone’s situation is different! Make sure to consult your trusted advisors to determine what is appropriate for your situation!
Information gathered from MD Producer article for professionals