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Weronika Jedrak's profile image
Weronika Jedrak's profile image
Weronika Jedrak
  • Investor
  • from NJ
  • Member since Jan 17, 2023
  • Posts 26
  • Votes 11
  • Experience 4 Yrs
  • Investments 7

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Weronika Jedrak's profile image
Weronika Jedrak's profile image
Weronika Jedrak
  • Investor
  • from NJ
  • Member since Jan 17, 2023
  • Posts 26
  • Votes 11
  • Experience 4 Yrs
  • Investments 7
Weronika Jedrak
  • Investor
  • NJ
11
Votes |
26
Posts
Tax, SDIRAs & Cost Segregation

Self directed IRA funds for private money lending

Weronika Jedrak
  • Investor
  • NJ
Posted

Hello, 

I have a questions about self directed IRA. I have a private money lender who is interested in lending on my latest flip, she would like to use her funds from self directed IRA account. Would she be taxed on that money if she took it to invest in real estate as a private money lender? If so, is there way around since this would be an investment under real estate ? Thank you for any information in advance.

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    Jay Hinrichs's profile image
    Jay Hinrichs's profile image
    Jay Hinrichs
    • #1 All Forums Contributor
    • Real Estate Consultant
    • from Summerlin, NV
    • Member since Jan 29, 2014

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    Jay Hinrichs's profile image
    Jay Hinrichs's profile image
    Jay Hinrichs
    • #1 All Forums Contributor
    • Real Estate Consultant
    • from Summerlin, NV
    • Member since Jan 29, 2014
    Jay Hinrichs
    #1 All Forums Contributor
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    Jay Hinrichs
    #1 All Forums Contributor
    • Real Estate Consultant
    • Summerlin, NV
    Replied
    Quote from @Weronika Jedrak:

    Thank you, Charles. She’s checking with another account as the first one told her if she pulled money out of it- she would be taxed on it. However, I heard if you use IRa for real estate related investment- there shouldn’t be tax involved. She is looking to lend for our gap funding so she would be in a second position. 


    you or her are confusing things..  If she has a IRA with custodian that does not facilitate real estate lending then yes thats an early distribution and tax is due.. If she has a custodian that does facilitate RE lending then no .. tax is differed back into the IRA and she only pays tax when she takes distributions later in life.. or at 70  .. tax free if its a self directed Roth.
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