Originally Posted by Venezial
I am 50 Years old with a wife and 3 kids and in desperate need to update my house. I am considering a substantial withdrawal (over 100K) from my 401K that I have been contributing into for near 25 years.
Question 1 - My company allows regular withdrawals of after tax contributions and associated earnings. Presumably I will have to pay capital gains tax plus the 10% penalty. How are the capital gains calculated? After completing the construction of course my house will be worth more. When I sell I will have to pay cap gains again - double taxation?
Question 2 - Since I am putting the money into my primary residence and of course I consider that just another retirement vehicle... Is there any way to avoid the penalty? Any place to plead the case?