Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Creative Real Estate Financing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 1 year ago on . Most recent reply

User Stats

4
Posts
0
Votes
Vladimir Patic
0
Votes |
4
Posts

401k Loan as downpayment

Vladimir Patic
Posted

I have read somewhere that if money from 401k is used to purchase an investment property that income from that property would be tax free.  Is this accurate or not?

Most Popular Reply

User Stats

3,969
Posts
5,675
Votes
Greg Scott
#4 Real Estate News & Current Events Contributor
  • Rental Property Investor
  • SE Michigan
5,675
Votes |
3,969
Posts
Greg Scott
#4 Real Estate News & Current Events Contributor
  • Rental Property Investor
  • SE Michigan
Replied

Totally Incorrect.

If you take money out of a 401k, you are taxed for taking the money out.  Whatever profits you make on the property will be taxed according to the tax laws and your personal situation.

If you rollover you 401k monies to a self-directed IRA, you can defer taxes on the gains of the property until you take the money out, at which time it is taxed at ordinary income. You may also be subject to UBIT taxes if you have purchased with any debt.

  • Greg Scott
  • Loading replies...