The Fields wanted to buy their first home. Mr. Field wanted to draw money out of their IRA, but Mrs. Fields was afraid of the tax consequences. What would their tax advisor most likely tell them? They can pull out money penalty-free if used as the down payment on their first home, but they would forfeit their $500,000 capital gain exclusion if they do so They can withdraw money out tax free of their IRA to use for any purpose as long as it is within 6 months of their closing date. They will experience many tax advantages including being able to deduct the interest on their mortgage, being able to withdraw the down payment penalty free from their IRA, and have up to $500,000 excluded from capital gains tax of their primary residence at the time of sale as long as they live in the home 2 of the 5 years prior to sale. There are no tax advantages to purchasing a home