SD-IRA or Roth cost and features comparison

[Paul Vail]

Has anyone worked up a cost and features comparison of the common / well-known custodians?  

[Dmitriy Fomichenko]

@Paul Vail,

Good questions!

If you are eligible for a truly self-directed Solo 401k plan - this would generally be the best option. This discussion will help you better understand all the benefits and potential uses of this vehicle:

https://www.biggerpockets.com/...

If you are not eligible for a Solo 401k, or if you have Roth IRA that you wish to self-direct, then self-directed IRA will be your option. You can use a self-directed IRA on asteroids to gain the checkbook control and bypass the custodian. To do so you will need a special purpose, single member LLC created underneath of an IRA, which you will manage and have full control over. This option is known as IRA LLC, IRA owned LLC, or Checkbook IRA. 

You can't use S-corporation in conjunction with the retirement account because a retirement account (which is considered a trust) can not be a shareholder of an S-corp. 

You can do private lending using either option, works pretty much the same regardless which option you select (but like I said overall SoloK will be better option if you qualify because it has several advantages over an IRA).

If you buy rental with an IRA using leverage - you will incur UBIT tax on leveraged portion of the property. That income is considered Unrelated Debt Financed Income with is subject to UBIT. 

Flipping and wholesaling maybe considered an active business or a trade and therefore will also result in UBIT, regardless if you do them in an IRA or 401k. Retirement accounts are designed to be invested passively.

I suggest you get on the phone with couple experts in the field and discuss the rest of your questions. There is limited amount of information you can get from the forums, you need to be talking to live person who can help you navigate through this.