December 10, 2025

Can You Use Retirement Money for a Condo Without the Penalty?

1 hour 4 minutes

In this episode, Anderson CPA Barley Bowler and attorney Eliot Thomas, Esq., tackle year-end tax planning strategies and answer listener questions on a variety of critical topics. They explain the new rules for research and development cost deductions following recent legislation, including the choice between immediate 100% deduction or five-year amortization for domestic R&D. Barley and Eliot cover the 72T procedure for penalty-free early IRA withdrawals, the strategic benefits of qualified opportunity zone investments for deferring capital gains, and how to use IRA funds without penalty for first-time home purchases. They discuss the complex rules for deducting expenses on mixed-use vacation homes, calculating tax-free administrative office reimbursements, and essential year-end action items including payroll, bonus depreciation, solo 401K contributions, and charitable giving strategies. Tune in for expert advice on maximizing deductions before December 31st!

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Highlights/Topics:

"What are research and development costs? How are they deducted?" - Domestic R&D costs can now be 100% deducted immediately.

"What expenses that I incur on behalf of my employer can I deduct on my personal 1040 tax return?" - Very limited options exist; reimbursement from employer is best approach.

"Can you please explain what a 72T procedure is?" - Take equal IRA distributions before 59.5 without 10% penalty.

"I am considering investing in an opportunity zone fund to defer capital gains. What are some top items I should be thinking about?" - Consider fund structure, compliance requirements, and ten-year holding period benefits.

[33:35] Title Question "How can I be exempt from paying the IRS the penalty of using my retirement money to buy a condo?" - First-time homebuyers can withdraw $10,000 from IRA penalty-free.

"Are expenses such as real estate property taxes and home improvements deductible on vacation homes that are used both for personal and rental purposes?" - Personal use over 14 days limits deductions to rental income.

"I'm attempting to calculate the reimbursements for our administrative office. How do I calculate, how much can I reimburse myself for tax-free every year?" - Calculate square footage percentage times home expenses for reimbursement amount.

Resources:

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