All Forum Posts by: Carl Fischer

Not sure what an LCC is. I use attorneys to setup corporate/company entities and CPAs to setup the books. 

@Juancarlos Cortina 

I get my rental income TAX FREE because I use Roth IRA to own rental properties. TAX FREE Income for life and beyond.
however, without using SDIRA/401k, your tax bracket is that of your ordinary income but without social security or Medicare tax -so you save 7,6% from your w2 job or 15.3 % if you have your own company. You also may get a break for depreciation which can help lower tax. 
Get your cpa or tax professional to help you understand taxes it’s important to building wealth. 

@Anthony Edwards👍

@Anthony Edwards

You will have to pay taxes on your SEP IRA when you take a distribution and generally a penalty of 10% if you are under 59.5 yo. There is an exemption for the penalty for a distribution of up to $100k if you have been affected by covid19.
However, you can use your SEP IRA to purchase real estate inside the plan as a plan asset. You will need a self directed company to help set it up. It is much more common today than in the past. It is relatively easy to setup. There are several ways to do it, buy directly in your Ira, form an LLC that the SEP owns, buy a private or public REIT, purchase shares of syndication, etc. This method will grow your SEP but distributions will be penalized unless you are 59.5 yo or you have other exemptions if you wanted the proceeds immediately. This is a method many investors use to diversify their portfolios.

@Marcia Langley

Did you inherit it in 2019 or 2020?

If the deceased was a spouse is different than someone else? Do you want to withdrawal it quickly or over as much time as possible?

You have more options if you inherited it in 2019. If you inherited in 2020 you basically will have to have it distributed by 2030.

@Tim Robinson in order to best answer your questions, it would be helpful to have some information clarified. Do you currently have a SEP IRA? What kind of deals are you referring to? Do you plan to keep those funds in your SEP and have the SEP IRA buy the investment, or are you looking for ways to take funds out of a SEP to use personally for the deals in question (this would be non-tax sheltered)?

If you want to purchase the investment for the deal you have in mind with your IRA, you would have to open a self-directed SEP IRA with an IRS-approved third party administrator. BiggerPockets provides a list of self-directed IRA custodians for you to reference on this site, which you can view here. Things to consider when choosing a SDIRA custodian are customer service, knowledge, experience, and processing speeds. Many investors have found success through investing in alternative assets with their self-directed IRA. Real estate is one of the most common options; you can own residential, commercial, raw or improved land in your IRA. Once you find the custodian that is right for you, your IRA can make investments in alternative assets to grow your future retirement savings through ways that utilize your personal knowledge and expertise.

Of course, this is just one of the ways to go, but it all depends on how you plan on using your funds. You should always consult with your financial or tax advisor for tax-related questions. I would be happy to connect if you have further questions.

@Brian Henderson there's a lot of useful information here. To reiterate the point made by @Nicholas Aiola, a self-directed IRA is required in order for you to be able to make investments in alternative assets with your IRA or 401(k). These IRAs, of course, must be held by an IRS-approved third-party administrator. There are many custodians and administrators out there. BiggerPockets provides a list of self-directed IRA custodians for you to reference on this site. You can check out that list here. Things to consider when choosing a SDIRA custodian are customer service, knowledge, experience, and processing speeds, as they will be integral to ensuring that the investments you have chosen to self-direct are facilitated efficiently. Real estate is one of the most popular alternative investment types; in addition to rental properties, you can invest in commercial, residential, or raw and improved land with your IRA.

It is a shame that your current company does not have a match policy for your contributions, but it is great that you are considering your options for savings now while you're young. In addition to the points made above, make sure you talk to a plan administrator about inservice rollovers or a loans from your current 401(k) if you are still employed with the company. Not all plans allow inservice rollovers or loans to participants. 

A self-directed Roth IRA is always a great idea. As @Chris Levarek said, it is a great vehicle for growing long-term retirement wealth. You pay taxes up front on your contributions, and all that rental income, and the profit from sales of your properties years down the line, will flow into your IRA tax-free. Consult with your accountant or financial advisor to see if now is a good time to open a self-directed Roth IRA. We have seen a spike in Roth conversions this year due to the affects of COVID-19 on people's finances.  If you have any further questions, I would be happy to connect.

@Kevin H. How did you make out on the deal? Can we get an update? Thank you

My cash offers are accompanied with a check -either personal or cashiers- for the offered price as it is almost always a very fast closing. I don’t get asked for proof of funds at that point. Sometimes I owe a little more and sometimes I get a little back at closing. 

@Steve K.

Irs publication 590 is a good place to start reading -also look up “Excess contribution” and time frames for corrections. Back door roth is another subject to read about pro rata conversions ie pretax and post tax conversion ratios.