Self Directed Roth IRA for rental houses

[James Maher]

Which companies do you use for your self-directed IRAs containing rental properties.  I know they all have different fee structures, and it seems like this is the major difference between them all.

I am 30 years old and just own one rental property now, outside of my Roth IRA, but I am about ready to purchase one in the Roth. Thanks for any advice on which company to use.

[Doreen Chaisson]

UBIT applies only to net income generated by the property that is attributable to the leveraged portion of the purchase, and only while the loan is in place. (Example, if you put down 60% and borrow 40%, roughly 40% of the net income is subject to UBIT tax. This "income type" is called UDFI - Unrelated Debt-Financed Income). As the loan is paid down, the impact of UBIT decreases. You'll need a good CPA to help you calculate this each year. Once the loan is paid off, the UBIT tax no longer applies to any income generated. However, there is an odd caveat - if you sell the property while the loan is in place OR within one year of paying off the loan, your IRA will be subject to capital gains tax on any profits. If you wait until one year and one day from when the loan was paid off, there is no capital gains tax.