![]() You should view the two transactions separately. ![]() I am debt free and don't want to borrow against my home. Zoot wrote:I see my IRA funds as having an "embedded" federal tax liability of 25% (my current marginal rate) so if I can use the 30% federal solar tax credit, I have effectively more than eliminated the tax liability.permanently. I see my IRA funds as having an "embedded" federal tax liability of 25% (my current marginal rate) so if I can use the 30% federal solar tax credit, I have effectively more than eliminated the tax liability.permanently. Regardless of how you pay for the solar system, remember to adjust your withholding, so that you won't get a $9000 refund next April. ![]() ![]() This would appear to be a natural use for a home-equity loan, as a loan taken out to improve your home won't count against the $100,000 limit (or the zero limit under the Alternative Minimum Tax) on deductible home equity loans. Grabiner wrote:You may have a penalty for the early withdrawal from the IRA, and you will lose future tax-deferred growth, so this probably isn't a good idea.Īnd you'll get the tax credit no matter how you come up with the money, so you shouldn't consider this as a reason for withdrawing from the IRA rather, it is part of the cost-benefit analysis, so the solar system only costs you $21,000 rather than $30,000. ![]()
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