Atlanta tax expert,

I moved back to my home country last year and withdrew my 401K. I bought a new home here. Can I claim this part of withdrawal to be penalty free?

Thanks.

Unfortunately, no. There IS an option that allows you to exempt up to $10,000 from the 10% Early Withdrawal Penalty, but that option is available ONLY for IRA withdrawals.

Your withdrawal was from a 401K, so the exemption does NOT apply. Sorry!

I converted fro 401K to IRA and withdrew out of IRA. Please advise.

If you are under the age of 59.5 years, you will pay a 10% Early Withdrawal Penalty PLUS pay taxes to the IRS and the state where you leave at your HIGHEST tax rate.

Has 60 days passed? If not, you can put the money BACK and avodd these taxes, which, depending on the state where you live, could be as high as 50%.