“We obtained a securities-backed line of credit on non-qualified accounts as a bridge loan so they would not have to sell any of their portfolio,” Rosen explained. He added that not only would they have had to pay capital gains taxes, they also would have missed the gain the stock market achieved in May.
The couple also took some money from their IRA to qualify for a mortgage and then repaid it so they did not have to pay taxes on those funds, he said. The extra money they needed was figured into their living expenses and paid for with normal retirement withdrawals.
“The couple paid nominal interest on the bridge loan and then paid off the line of credit when they sold their home,” Rosen said. “They accomplished the whole thing in about 75 days, all of which occurred after the coronavirus struck. Now they are settled in their new dream home.”