Investing with Self-Directed IRA: right 4 high-income earners?

[Sarah Donatelli]

Hello all,

I'm exploring the possibility of Note Investing. My husband and I both have busy careers, and I'm looking for sources of passive income. I've read books (Turning Distress into Success; Performance Anxiety; Seller-Financing & RE Notes in the Dodd-Frank Era), explored the posts in this forum, listened to @Bob Malecki 's BP podcast episode, and now have some (hopefully reasonably intelligent) questions to ask. Thank you in advance for sharing your expertise!

My first set of questions is on the topic of taxes. Are there tax benefits to investing through a self-directed IRAs for high-income earners? I currently do not have a self-directed IRA, and I'm wondering if using cash to do deals would be OK. Are profits taxed at the capital gains rate if you hold the note for > 1 year? If so, would both rental income and income from the note sale (if sold) be taxed at the capital gains rate?

Any thoughts would be greatly appreciated.

Thanks! 

Sarah