All Forum Posts by: Account Closed

Alison Mercer I hope you don't mind me asking... How is your project doing so far? Take before and after photos and post here would be awesome. All the best!

As you probably know, the backdoor Roth IRA conversion is typically done for people that have reached over the income limits in order to be eligible for Roth IRA contributions. However, does anyone know what would happen if I go ahead contribute to my traditional IRA and quickly convert it into my Roth IRA with the expectation that my income would reach over the income limits but it didn't happen at end of 2016? What impact would it give? I mean, if my income hasn't reached over income limits for Roth IRA contribution for 2016, I would have just made direct contributions in my Roth IRA instead of doing the backdoor Roth IRA conversion. Let me know if you know or if you know someone that can answer, that would be greatly appreciated!

As you probably know, the backdoor Roth IRA conversion is typically done for people that have reached over the income limits in order to be eligible for Roth IRA contributions. However, does anyone know what would happen if I go ahead contribute to my traditional IRA and quickly convert it into my Roth IRA with the expectation that my income would reach over the income limits but it didn't happen at end of 2016? What impact would it give? I mean, if my income hasn't reached over income limits for Roth IRA contribution for 2016, I would have just made direct contributions in my Roth IRA instead of doing the backdoor Roth IRA conversion. Let me know if you know or if you know someone that can answer, that would be greatly appreciated!

Gotcha. Very good explanation. Thanks for all your help. @Dave Foster

@Dave FosterThanks for your response. I really appreciate it. So, in other words, I will have to purchase $700K worth of a replacement property with $525K debt and $175K equity cash or higher purchasing amount. Correct?

As for Section 121, I know that I would have to live in my primary residence for at least 2 years out of the preceding 5 years to be eligible for $250K capital gain exclusion (or $500K for a couple). However, it is my understanding if I decide to rent out in the 3rd-5th year, then $100K ($50K each year x the first 2 years I have lived in) will be excluded from tax but the 3rd-5th year, meaning $150K ($50K x last 3 years) will be taxed because I do not live there as my primary residence as it is being rented. No?

Good afternoon! I have a question that I am hoping you or if you know someone that can help answer. If I decide to do a home equity loan on my primary residence and then convert it into an investment rental property next year but still expect to hold it for at least 5 years, how will that impact my 1031 exchange? Let's say if I have $360K mortgage balance now and when applying for a home equity loan, the appraisal comes back with $700K market value. That being said, I would be allowed to take out $165K cash based on 75% LTV. My debt would increase from $360K to $525K. Then when I decide to execute 1031 exchange, I wonder how does my home equity loan impact the value I must carry over to my replacement property? What's the value I will be required to spend on my replacement property? $700K ($525K debt and $175K equity) or $535K ($360K debt and $175K equity) after paying off the home equity loan in full at closing? I have not been able to find an answer to this question. Your help is greatly appreciated.

AUDREY DESOUZA you need to tag Bill for him to get notified on your reply. Just FYI.

Looking for a general contractor in Parma, OH. Please provide references of good contractors in the area if you know. Many thanks!

Wayne Brooks care to elaborate why wouldn't the lower unit be qualified for 1031? I thought it can as long as it is intended for investment purpose. No? Thanks for commenting. Arthur

I just re-read my post and realized there are comments that are somewhat contradictory to one another and I apologize for this. For clarification, we currently do not want to sell our existing property because of the excellent loan terms it possesses. However, if things make sense, we may consider selling. We believe that keeping our current existing property makes a lot of sense for us and we think we should do something with the lower unit. Unless you disagree, feel free to bring up some good questions in this discussion. I want to see what you guys have in other perspective. Thanks.