TLDR: I'm under contract for 2 homes and 1 of the deals may fall through. Can/should I cash out some of my brokerage to cover the other deal with plans to immediately replenish the withdraw once I sell the house with the bad deal? What are the tax consequences?
This is a first for me and admittedly, my blind spot with finances is taxes. So any help would be appreciated.
I'm moving to a new state for work (AZ). I'm selling my current home (home 1) where I will net $121k and buying a new home (home 2) in Arizona. I'm under contract for both houses; to sell [home 1] and buy [home 2].
[Home 2] is an assumable loan with a 3% interest rate, so very attractive. I have to bring $91k to the deal to assume the loan. Initially, this was not a problem because I'm closing on [home 1] 3-weeks prior to closing on [home 2]. My plan was to take the $121k from the sale of [home 1] and put the $91k down on [home 2] and use the rest (~$30k) for some improvements I want to make (new master shower, landscaping, etc).
I learned yesterday that the buyer of [home 1] ran into an issue with his lender and the lender is reconsidering his finance approval. We find out more today/tomorrow. Obviously, if the deal with [home 1] falls through, I can't bring the equity into the deal with [home 2]. My contract with [home 2] is contingent on the sale of [home 1], but I also have the option to proceed if I wish.
I can now finally ask the question: If I cash out $100k from my brokerage to cover the deal on [home 2] and replenish it as soon as I sell [home 1], what are the consequences? Tax liability? Are there programs/policies/laws that allow me to not get penalized if I replenish the brokerage in a given period? Anything else I'm missing?
Thanks!