What are the tax implications of borrowing from your IRA?

If you have an IRA, borrowing money from it may have some tax implications that you should be aware of. When you fund your IRA initially, you are doing so with pretax dollars. However, when you repay your IRA loan, you are going to do so with after-tax dollars. This means that you are essentially at a disadvantage when it comes to repaying the loan. However, you also have to keep in mind that you get a major advantage when taking out this loan because you do not have to pay taxes on the amount that you borrow.

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