Loans from IRAs Not Permitted

During this difficult economic period, taxpayers struggling financially should be wary of using IRA funds to supplement their income. In a recent real-life example, a taxpayer struggled to pay his business expenses, home mortgage, and family living expenses. To meet those needs, he withdrew funds from his Individual Retirement Account (IRA), which he intended to be a loan and not a distribution. He had previously borrowed money from his 401(k) plan to purchase a home.