No.  


All funds taken out of a pretax Traditional IRA are subject to tax regardless of what you do with the money.

You could reduce your taxable income by maxing out your 401K for the year (you could also max out your HSA if you contribute to one). Assuming both of you work, that might take a chunk out of your tax bill.

We're considering liquidating a small inherited IRA in order to finance a first-time home purchase. After talking to a financial advisor, we are free to do this but it sounds like we will be paying regular income tax on whatever we pull out of it. Due to the timing, it is our only option to finance this. Is there anything we can do to mitigate some of the tax?

Liquidating Inherited IRA for 1st time home purchase. Taxes?