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Old 03-14-2016, 05:35 AM
 
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like all tax situations , they only become a problem when they are a problem .

it can be very easy in an audit to see where you spend your time and for how long . the states do it all the time when folks claim their vacation homes as their primary home state and work and actually live in another
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Old 03-14-2016, 06:00 AM
 
Location: Mount Airy, Maryland
10,496 posts, read 5,967,660 times
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Quote:
Originally Posted by mathjak107 View Post
like all tax situations , they only become a problem when they are a problem .

it can be very easy in an audit to see where you spend your time and for how long . the states do it all the time when folks claim their vacation homes as their primary home state and work and actually live in another
Credit card purchases?
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Old 03-14-2016, 06:03 AM
 
72,175 posts, read 72,150,380 times
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cell phone site triggers say exactly where you are , eezee pass , banking records , credit cards , etc. ny throws the burden of proof on you all the time when challenged to document your time . the irs does the same thing . they do not have to prove a thing , you do .
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Old 03-14-2016, 06:44 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,727 posts, read 40,135,596 times
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Originally Posted by 1insider View Post
I have a question about this. I have seen several people buy vacation rental properties in their self-directed IRAs. I suspect some of them occasionally use their rentals for their personal use, strictly against the rules. How can they be found out? Is there a branch of the IRS that investigates occupancy of rental property in self-directed IRAs? If so, how would they ever be able to figure out that an owner used his property a couple of times in a year in which the property generated rental income?
IRS WILL find out, and you will get a very expensive bill... 100% taxable distribution of IRA in a year you least want it... + any other fees and penalties / depreciation recapture they would like to collect. I recently had a need to use an IRA property, but no way did I consider it an option.... I found another place . I have several homes adjacent on rural acreage, so IRS would not have been able to discern, but certain stuff is not worth the risk (and I am very much a risk taker.... Retiree at age 49, with no master plan... Currently without health insurance due to what I consider unreasonable costs... $1700/ month for $20k deductable. I am using a $800/yr travel policy and staying more than 100 miles from home.... No problem at the moment,,, 11,000 miles from home.)

I am very used to living under a watchful eye.... My residence is in a federally protected National Scenic area. Drones, satellite surveilence, digital image comparisons, daily observations from volunteer private investigators... If I so much as touch a paint brush to exterior, or change an exterior light, I will be paid a visit by code enforcement. Camo netting and night work is my norm. IRS is far better equipped to catch you.
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Old 03-14-2016, 07:52 AM
 
Location: NC Piedmont
3,950 posts, read 2,895,869 times
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When I am 59.5 (a little over 2 years), I will immediately roll over nearly all of my 401k into IRAs but my primary motivation is that I have been at the same job for quite a while, maxing out the 401k, and have an awful lot of my eggs in one basket. I have no specific reason to think my funds are at risk, but I don't like having so much in one account. There is also the issue of emergency access. I could get money in a pinch, and if it is after age 59.5 it would just be taxed and not assessed the extra penalty. But it would not be very quick.
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Old 03-14-2016, 09:58 AM
 
Location: rhode island
33 posts, read 22,869 times
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Quote:
Originally Posted by Pocopsonite View Post
Since you're still working, is there an employer match for your contributions? If so, keep contributing to the 401(k). When you retire, you can roll it over into an IRA. But, as previously noted, you need to make good investment decisions regardless of the label. If your 401(k) is not doing well, especially over the past few years, it's because you haven't chosen funds that perform well.

For your IRA rollover, consider Vanguard index funds. Among the lowest cost in the industry.

i'll be retiring in 4 months, my 401 with my employer is handled by fidelity,ill see if I can get some advise from them seeing how they have my money now. the advise from all of you has been great but so many differing opinions are leaving me unsure as to what to do thank you
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Old 03-14-2016, 02:40 PM
 
Location: Texas
1,976 posts, read 1,382,776 times
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Management cost for a 401K can be rather high. At retirement I rolled over my 401K, profit sharing and even my retirement into a self directed IRA with etrade. The big mistake was to rollover the retirement account. You have far greater options within a self directed IRA than a 401K. The other problem with an IRA is that day trading can be restrictive.
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Old 03-14-2016, 02:43 PM
 
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The answer is almost always IRA.

Anything your company and give you is easier and usually cheaper to access yourself via Fidelity, Schwab, Etrade, Trowe, etc. AND you get the benefit of thousands of additional options plus greater control.
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Old 03-14-2016, 02:54 PM
 
4,342 posts, read 2,280,321 times
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Quote:
Originally Posted by ReachTheBeach View Post
When I am 59.5 (a little over 2 years), I will immediately roll over nearly all of my 401k into IRAs but my primary motivation is that I have been at the same job for quite a while, maxing out the 401k, and have an awful lot of my eggs in one basket. I have no specific reason to think my funds are at risk, but I don't like having so much in one account. There is also the issue of emergency access. I could get money in a pinch, and if it is after age 59.5 it would just be taxed and not assessed the extra penalty. But it would not be very quick.
What are you waiting for ? A crash ?

Roll it and max your diversification. Do you remember that company called Worldcom ? Enron ? Companies often pay their match in shares which never diversify even when vested. In 2000, I found out such supposedly awesome funds - like Fidelity Magellan and Fidelity Income had a large percentage of the exact same stocks and guess what > 50% value gone within a couple of weeks. Never again for me. I am now in Metals, Dividend Payers, Blue Chips, Real Estate, bonds and cash - always, always diversify.
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Old 03-14-2016, 05:33 PM
 
Location: NC Piedmont
3,950 posts, read 2,895,869 times
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Quote:
Originally Posted by Vacanegro View Post
What are you waiting for ? A crash ?

Roll it and max your diversification. Do you remember that company called Worldcom ? Enron ? Companies often pay their match in shares which never diversify even when vested. In 2000, I found out such supposedly awesome funds - like Fidelity Magellan and Fidelity Income had a large percentage of the exact same stocks and guess what > 50% value gone within a couple of weeks. Never again for me. I am now in Metals, Dividend Payers, Blue Chips, Real Estate, bonds and cash - always, always diversify.
No, I am waiting until I can do it without a penalty and tax assessment. My plan allows in service distributions at age 59.5. To get it before that, I would have to leave my job or get it for hardship and the tax and penalty would be assessed.

I am diversified. I work for a smallish closely held company; no ESOP. The 401k is a decent one with a lot of good funds to choose between. I think the chance that something happens with the company or the company managing the 401k is very small but the chances of losing a sizable portion would be further reduced if I had it in multiple accounts.
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