Placing rental income into a retirement account?
Is there a way to defer some rental income into some kind of retirement account when retired?
Lets say someone was able to live entirely off savings for a year, could they somehow put their rental income into a deferred (not annuity) retirement account and pay no taxes?
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
The simplest thing is just to use the income from your rentals to fund your contribution to your IRA. Unfortunately, that's only a few grand per year and is subject to income limitations.
You might look into a Solo 401K and see if you could set up a company that owns rentals and using the income to fund the 401K. The contribution limits are much higher. You do need to watch out for the self-dealing rules. Those probably mean you can't put current rentals into this deal. You already own those, so selling them to a qualified plan of any sort isn't allowed. Solo 401k's don't work for me because I have a regular job, so I've not looked at them in detail.