How does self direct IRA works?
Hi, I am new into this whole IRA thing and need some education on the concept of self directed Roth IRA and self directed tranditional IRA. Please correct me if I misunderstand any of these concept.
For self-directed Roth IRA, I believe can contribute $5,500 each year until my MAGI is greater than $117,000. The SD Roth IRA is after tax contribution. The SD Roth IRA can be used for tax lien and buying property and rent it. By age 59.5 and I decide to withdraw my investment from IRA, I get all those valid tax liens and real estate properties without being tax. Is that correct?
On the other hand, SD Traditional IRA has similar contribution and income restriction limit. By age 59.5 and I decide to withdraw my investment from IRA, I have to pay tax I own on all those properties, how does that work if my assets are in term of properties? How do they value the houses? Do I have to sell some houses on that profolio to pay off tax I own? Do I get to keep (any) properties when I withdraw from the IRA? Or do I have to sell all the properties in SD Traditional IRA to cash basis and pay the tax?
Thanks in advance.