Residential Real Estate Broker · Pensacola, FL · Member since 2012 · 221 posts · 49 votes
I've searched exhaustively but can't find clear answers. I understand that a SD401K allows one to manage their own rental, do their own labor on repairs/etc whereas a SDIRA won't? Where can I find the specific regs on this and any other differences between the two (401k vs ira)?
Two friends want to buy a vacation unit with their SD401K's, 50/50 ownership. They want to use the unit about 25% of the time. Is this feasible? If not, what if they paid market rent through a rental broker? If still not, what if they bought/owned the unit using 12.5% each personally and their SD401k's own the other 37.5% each? Thus accomplishing a personal ownership for the 25% of the time they'll use the unit personally.
Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
13y
Originally posted by Steven Hamilton II:
Sandy Blanton,
You cannot in any way personally benefit from your IRA's ownership. That means if you use it personally it will be disallowed.
Hate to be the bearer of bad news.
-Steven
How about if they pay their IRA (out of their own pocket) market rent during the time when they use the vacation home personally. Even though they will be paying the rent using AFTER tax money, they will benefit from the fact that they are paying themselves (via the IRA), granted the money will be taxed a 2nd time when they retire and get distributions from the IRA.
Residential Real Estate Broker · Pensacola, FL · Member since 2012 · 221 posts · 49 votes
13y
Steven I read somewhere you can partner with your own sd401k on a property. Ever heard of this and would doing so change the personal use issue? Thanks.