About Michael Kraus

Comments

  1. Ila says:

    We are in a difficult situation where we purchased a home in 2011 and so pulled all our retirement savings to pay for it….While normally our household income is just above $100K, for the year 2011 due to the addition of retirement savings to our 2011 income as “Income” (even though we are putting it away in a long term investment of our first home), we have been catapulted to an artificial income level of $250,000 for 2011….so we are having to pay over $60K as penalties and taxes on the artificial income and an additional $20K+ as income taxes on our regular income. We certainly had taken in to account the tax saving due to the deduction in mortgage interest when calculating the feasibility of purchasing our home in NYC. A repeal of this tax benefit would certainly compromise us and may push some of us in to foreclosure before we have had a chance to stabilize ourselves after our big LIFE EVENt of purchasing our first home.

    The government needs to make sure they take in to account the situation for people in their first two years of home ownership when the going is the toughest for a first time home purchaser.

    Aso I do not understand why investment in the purchase of a primary home/residence is not considered a long term investment deserving of being viewed as taking care of oneself for retirement….why is the exemption from penalty for withdrawing from a retirement savings account only $10,000 per individual? We are having to pay a $15,000 as a penalty alone of the $60,000…. I do not think we should have to pay a penal tax for purchasing a primary residence. It seems very lopsided and typically effects the smaller earner as most of them do not have excess cash for purchase a home and have to reach in to retirement savings to purchase a home. I hope something is done to resolve this.

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