I'm considering withdrawing up to 10K from my traditional IRA for a first-time home purchase. My mutual fund company offers the option of withholding taxes (at a % I specify) from this distribution. What are the advantages to this? What are the disadvantages?
Also, how do I prove I used the funds for closing/as part of a downpayment? Do I sign the distribution check over to the bank? Do I have to worry about co-mingling money? Thanks very much.
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