All Forum Posts by: Alan Grobmeier

@Gebson Pinheiro, my point was that IF you were to buy properties with your Roth AND equity strip your rentals, you would no longer have to pay the tax man.  ;-)

There is a legal way for your to avoid taxes on your SS and not run amok with the IRS on your SDIRA.

There is an easy formula to make sure your are 'net zero' on your schedule E:  

Income - (interest expense + taxes + insurance + hoa + depreciation) = ZERO.  

You can actually make this a negative number and still be pocketing money via positive cashflow.  That's what Trump does and why he doesn't want anyone to see his taxes.  Not a 'problem', perfectly legal, but the masses won't understand.

As far as what to do with the money from the equity strip:  That's what 'bucket lists' are made of.  ;-)   If that doesn't work for you, buy a couple of RV's and rent them out.  Instant schedule C business loss (due to depreciation again).  You will do 'great'.  ;-)

If you've held these properties a long time and are out of depreciation expense, time to do a 1031 exchange.  ;-)

You CAN avoid taxes on your SS income.  You just aren't thinking hard enough.

Another thing to think about:  IF you were able to do this deal, you would personally have to pay back depreciation recapture on the properties to the IRS.  That could cost you significantly.  Selling them should probably not be an option for you.  You are better off dying with the properties and having them go to your heirs with a new cost basis and no depreciation expense.

Alan

@Gebson Pinheiro, ROTH.  Ok.  I may have missed that part in the original post.

Why not just go out and buy other properties with your ROTH?  

If you do that, equity strip the personally held, you can avoid all the tax & have a wad of cash.  Since you are not wanting 'personal' income, that could be an option.

Way too thin for a buy & hold.  Bad area, won’t be a ‘set it/forget it’ property.  Minimal appreciation in Bakersfield compared to elsewhere.

Try looking at Tehachapi area if you are near Bakersfield.

(Rent x .75) - (mortgage + misc expenses) = ‘bona fide rental income’.

The only way you really get there is ‘free & clear’ properties.

@Gebson Pinheiro, For just a moment, let’s say you could do what you are trying to do.  Where is the savings?  Your ira would distribute cashflow to you in the same amount you are receiving today.  How does that help you avoid your SS being taxed?

You would also have to reclaim your depreciation expense & pay tax.  That could be significant, depending on how long you’ve owned the property.

Not sure how having these properties in a sdira would save you money.  

If you own them free & clear, I think equity stripping would be a better (and legal) route to explore.  What am I missing?

@Mahesh Sam

I only care about ‘good’ states for LL.  If it’s not on the list, it isn’t ‘good’.  ;-)

https://learn.roofstock.com/bl...

@Kyle Brown, stop talking.  It won’t do any good.  Get an attorney if the property is in a ‘blue’ state.

Seems odd to screw up on month 2.  Did this person pass credit/background check?

STR vs LTR is a huge difference and require much different strategies. I think you need to determine your business model & then move forward.

@Paul Moore, but what do you do when Bernie Madoff is offering 10% returns when the rest of the market is getting hammered by 20%?  ;-)  Do you go 'all in' then?  ;-)

Is hindsight 20/20?