Roth IRA vs 403b conversion to SDIRA

[Matt Henshaw]

I have $100,000 in two separate retirement accounts, a 403b & tradition Roth IRA account. I have been retired for two years and am currently 56 years old. Here are my questions:

1.  Would it be a bookkeeping nightmare to try roll both of these retirement accounts into one SDIRA to purchase a property of about $170,000?

2.  If I was to purchase something less than $100,000 and only use one of these accounts, which retirement account would be best to move into the SDIRA to use?  (from tax purpose standpoint?)

Thanks!

[George Blower]

@Matt Henshaw

I understand that you are contemplating combining pretax traditional retirement funds and Roth retirement funds in a single investment. While this does add some complexities, they can be managed.

Here are some considerations:

• For example, you could rollover the pretax funds to a traditional IRA and the Roth funds to a Roth IRA which will allow you to invest in a single LLC.
• This LLC would have two members (i.e. each IRA account) where the ownership percentages would be in proportion to the amount of funds invested. A partnership tax return would need to be filed for this LLC (e.g. a form 1065 at the federal level).
• You could then invest in the single investment through the LLC. You would have checkbook control as the manager of the LLC.
• The investment would be titled in the name of the LLC and all funds would flow in and out of the LLC bank account (e.g for income and expenses). To the extent any funds are returned to the IRA (as a net return on the investment) in proportion to the ownership percentages.