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Old 06-19-2019, 12:34 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
5,434 posts, read 4,083,759 times
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Quote:
Originally Posted by H'ton View Post
I'll answer you concerns here:

much of the benefits of real estate are lost ...(A)no depreciation allowance , (B)no long term capital gains or (C)zero tax bracket . no write offs , (D)you cannot add money to pay for things that go wrong .

A) Ideally, I'll pay for the property with money already in my ROTH IRA so my ROTH will own the property PLUS, the rental income generated from the property would be reinvested and the growth would be TAX FREE as per the rules of a ROTH IRA investment.

B) There will be capital gains but the growth in the value of the Real Estate, if/when I were to sell, wold be tax free.

C) Again, this is a ROTH IRA. The investment will be contained within the ROTH IRA umbrella investment.

D) The money left in the ROTH IRA wold be used for maintenance items. The profit will be reinvested. For large items, i will have insurance or again, the maintenance costs could be withdrawn to maintain the ROTH IRA investment.
You have all of this correctly, but I donít think you can go 50-50 with yourself.
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Old 06-19-2019, 01:49 PM
 
6,943 posts, read 3,855,193 times
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Quote:
Originally Posted by aslowdodge View Post
You have all of this correctly, but I donít think you can go 50-50 with yourself.
Probably can in a REIT that is owned by more than one entity, ie. he owns half, the REIT owns the other half.
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Old 06-20-2019, 12:28 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by kokonutty View Post
Probably can in a REIT that is owned by more than one entity, ie. he owns half, the REIT owns the other half.
I don't think that will fly.


Prohibited is an entity (corporation, estate, partnership, etc.) in which you own at least 50% of the voting stock, directly or indirectly.
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Old 06-20-2019, 12:56 AM
 
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personally i see zero reason to buy brick and mortar real estate unless a public reit in my ira in can be a real issue at rmd time
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Old 06-20-2019, 06:28 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
5,434 posts, read 4,083,759 times
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Quote:
Originally Posted by mathjak107 View Post
personally i see zero reason to buy brick and mortar real estate unless a public reit in my ira in can be a real issue at rmd time
Please explain.
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Old 06-20-2019, 06:41 AM
 
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it is to complex to deal with in an ira .. you could have an issue if you need to inject more money . , hard to get mortgages , ,etc
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Old 06-20-2019, 07:15 AM
 
10,181 posts, read 12,231,385 times
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Quote:
Originally Posted by mathjak107 View Post
much of the benefits of real estate are lost ...no depreciation allowance , no long term capital gains or zero tax bracket . no write offs , you cannot add money to pay for things that go wrong . you cant get a mortgage, it can be very very hard ....Only non-recourse financing is allowed. In other words, the IRA holder cannot personally guarantee a loan made to his or her IRA. As a result, in the case of a Self-Directed IRA, one could not use a standard loan or mortgage loan as part of an IRA transaction since that would trigger a prohibited transaction pursuant to Code Section 4975.

bet you did not realize all this stuff .
Also the Roth has only been around for about 20 years. Not too many people have big enough accounts to be able to buy real estate.
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Old 06-20-2019, 09:13 AM
 
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well there are conversions and 401k money that may be going in after one leaves a job so i wouldn't assume the balance is small . i have more than a million in my traditional ira which hypothetically i could have converted over the years
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Old 06-20-2019, 03:44 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
5,434 posts, read 4,083,759 times
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Quote:
Originally Posted by mathjak107 View Post
it is to complex to deal with in an ira .. you could have an issue if you need to inject more money . , hard to get mortgages , ,etc
I understand that part, you mentioned RMD and that was what I was curious about wondering if there was something I had missed.
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Old 06-20-2019, 03:59 PM
 
71,463 posts, read 71,652,652 times
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Quote:
Originally Posted by aslowdodge View Post
I understand that part, you mentioned RMD and that was what I was curious about wondering if there was something I had missed.
An inherited Roth has non taxable rmds which could be a problem if it is real estate ..it would all have to come out in one shot losing any tax advantage going forward for the heirs, you can’t sell off the living room
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