Self Directed IRA profits

3 Replies

A bit of a new guy here.

If I take my 401K after I leave my company and move to self directed and then buy 1 or more rental properties in cash.

Does the monthly income from the rental have to be moved into the Self Directed IRA or can that be income?


It's the IRA's income, you can receive any current benefit from SD IRA investments under IRS rules.

@Christopher Lopez  

The income from rental properties owned by your retirement account belongs to your retirement account. You can't personally use it now.

Think of it this way: if your retirement account owns stocks or mutual funds and there is a dividend payment - where does it go? Can you take it out? 

You probably not considering taking the dividend payments out because you understand that it belongs to your 401k. The same is with self-directed IRA or 401k. The only difference is that you are not limited by your custodian on the investment choices.

Hope this helps.

The cash goes back to the IRA. Make sure you have a clear trail showing that as well. The deal is you don't have to pay taxes on any of the RE profits till you start taking it out.

I try to think of the IRA as it's on independent LLC.

Using your IRA is a great way to get in to real estate! make sure to talk with tax professionals who already have experience in real estate though an IRA!

Good luck to all of your success,

Tristan Michael Chicklowski  

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