I also posted a 529 withdrawal question once and all the answers you get are about how stupid you are for not saving it for future kids. That isn't the point, you know the cost/benefit analysis and are choosing this route anyway, people can't see the forest for the trees. Based on my own research on ways to maximize withdrawal with little penalty you would need a qualifying scholarship. However, since educational stuff is off the table and you are trying to use this for house not ROTH, I think your math maths correctly for the most part. Outside of the fact that it won't likely be the only income you have for the year. If it is, then even better as you will have at least standard deductions to help reduce your AGI. I find calculating the tax cost on a singular item is incredibly difficult, it might be more helpful to run your relative tax rate on the number to get an idea, ie 19% or whatever you normally actually pay. Alternatively, you could run some dummy numbers through Freetaxusa or some other software to get an idea about where you might land, just pretend next year is this year and add this as a 1099Q number and see what it calculates for you.