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The certified indebtedness can be comprised of a loan incurred by the borrower to acquire a principal residence or a qualified home improvement rehabilitation loan. There is an IRS annual limit on the tax credit equal to the lesser of the borrower’s maximum tax liability or $2,000.
Jan 06, 2021 · My previous answer assumed the $50K was in a checking account was in a non-retirenent account. If instead, that $50K was in after-tax portion of 401k, it can be moved in part or whole to Roth 401k or elsewhere depending on 401k plan rules.
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