Central District Consumer Bankruptcy Attorney's Association

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Is the W/D from the IRA subject to tax penalty?
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Alik Segal
Sent: Tuesday, April 19, 2011 10:25 PM
To: CDCBAA Listserv; bk; bootcamp-attorneys
Subject: [cdcbaa] Whether a loan app expressing intent to dip into an IRA to
pay the mortgage jeopardizes the IRA exemption?
Listmates,
The procedural posture of this question is unusual. Client has no plans to
file BK. Rather, she is buying a condo and asked whether it is "OK" to sign
a letter requested by the mortgage broker.
The client is semi-retired, has limited income ($2K/mo) and a large IRA
($1M). To compensate for her low income, she was told that she needs to say
that she intends to dip into the IRA at the rate of $6.5K/mo. The broker
asked her to write a letter expressing this intention. Also the loan
application shows IRA withdrawal of $6.5K/mo as income.
(1) Would such statements (A) in the loan application and (B) in the letter
jeopardize the IRA exemption in the event this client needs to file BK?
(2) This is a California purchase-money 1st mortgage, so the lender would
not be entitled to a deficiency after a foreclosure. However, in a
jurisdiction that allows a deficiency judgment post-foreclosure, would the
IRA exemption be compromised as a result of the above statements re: intent
to dip into the IRA to pay the mortgage?
Alik Segal
Alik.Segal@gmail.com
310-362-6157
Cal. CD, Los Angeles
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Message
Is the W/D from the IRA
subject to tax penalty?


David A.
Tilem
Certified Bankruptcy
Specialist*
The post was migrated from Yahoo.

As to purchase money in CCP 580B, the lender may sue the borrower for fraud in
persuading the lender to make the loan in the first instance.
Paul Horn
Attorney at Law
Certified Public Accountant
1045 E. Valley Blvd., Suite A215
San Gabriel, CA 91770
800-380-7076
________________________________
To: CDCBAA Listserv ; bk ;
bootcamp-attorneys
Sent: Tue, April 19, 2011 10:25:10 PM
Subject: [cdcbaa] Whether a loan app expressing intent to dip into an IRA to pay
the mortgage jeopardizes the IRA exemption?
Listmates,
The procedural posture of this question is unusual. Client has no plans to file
BK. Rather, she is buying a condo and asked whether it is "OK" to sign a letter
requested by the mortgage broker.
The client is semi-retired, has limited income ($2K/mo) and a large IRA ($1M).
To compensate for her low income, she was told that she needs to say that she
intends to dip into the IRA at the rate of $6.5K/mo. The broker asked her to
write a letter expressing this intention. Also the loan application shows IRA
withdrawal of $6.5K/mo as income.
(1) Would such statements (A) in the loan application and (B) in the letterjeopardize the IRA exemption in the event this client needs to file BK?
(2) This is a California purchase-money 1st mortgage, so the lender would not be
entitled to a deficiency after a foreclosure. However, in a jurisdiction that
allows a deficiency judgment post-foreclosure, would the IRA exemption be
compromised as a result of the above statements re: intent to dip into the IRA
to pay the mortgage?
Alik Segal
Alik.Segal@gmail.com
310-362-6157
Cal. CD, Los Angeles
As to purchase money in CCP 580B, the lender may sue the borrower for fraud
in persuading the lender to make the loan in the first instance.

The post was migrated from Yahoo.