Are you thinking of taking a loan from your IRA? Think again. Although most people consider their IRA account just another retirement account like their 401(k), the IRS does not permit you to take a loan from an IRA. If, somehow, you figure out a way to take a loan from your IRA account (your IRA custodian should know better than to allow this), the IRS will blow the whistle on the transaction and the value of the entire IRA will be included in your income for the year in which the loan was taken. Ouch. That means that the entire value of the IRA account is immediately charged to you as income, with all of the applicable taxes and potential penalties applied.
One other note related to loans and IRA’s: If you pledge any portion of your IRA account as collateral on a loan, the portion of the IRA that you pledged as collateral is immediately charged to you as income, with all of the applicable taxes and potential penalties applied.
