Pay deferred tax in SDIRA vs. Pay capital gains each year

[Darren Looker]

We have around $25K in several traditional retirement accounts. We'd like to invest in real estate and already have deals lined up. Which is better/cheaper from a tax standpoint- roll into an SDIRA and pay taxes later or pay the 20% penalty now and put the money in an LLC and pay capital gains on any profits each year? I already have an LLC.

[Mike Reynolds]

Originally posted by @Darren Looker:

We have around $25K in several traditional retirement accounts. We'd like to invest in real estate and already have deals lined up. Which is better/cheaper from a tax standpoint- roll into an SDIRA and pay taxes later or pay the 20% penalty now and put the money in an LLC and pay capital gains on any profits each year? I already have an LLC.

Your penalty will be more like 30% because you will have tax and early withdrawal expense. In an sdira you would have to finance with non recourse money also and probably pay UBIT on the borrowed part of the money. So both have their drawbacks. 

I'm sure someone will chime in that has a better grasp on this than me.