Suggestions/ help with a 457B cash out.

[James G.]

I am considering cashing out a 457 B plan in order to use the monies toward investment properties. With my situation I will Not have to pay the 10% early withdrawal penalty but would be subject to the federal/ state taxes. I was wondering if there is any creative way to roll the money into another fund or use towards a investment in real estate and not have to take the up front hit of the fed/ state tax burden? Thank you in advance.

[Steven Hamilton II]

John, Don't forget however, that if it is used for investing you can write that interest off on your investments.

For example if you buy a house with a 50k loan from a 401k and you are paying yourself 6% interest, you will be able to take the interest as an expense against the rental property the same as if it were a mortgage.

-Steven the Tax Guy