The best tax advantage on cashing out the IRA if there is any.

[Peter Thielemann]

I have a relitive that own's several rentals. He's suggested for some time now to invest in rentals. I have a few years left before I retire and I'm digging into withdrawing some money from an IRA. I'm looking into the best tax advantage on cashing out the IRA if there is any. Getting back into biggerpockets looking for additional outside the box suggestions.

[Matt Devincenzo]

@Mark S. It would depend...I'm assuming @Peter Thielemann isn't currently retirement age but would be in 3 years based on his post. In that scenario taking a withdrawal now will result in taxes and penalties. In three years it would be taxes only...and with planning you could distribute over a couple tax years to keep the marginal rate low.

@Peter Thielemann distributing is taking the asset out of IRA ownership and into your personal ownership. Same as if you distributed cash, but instead you'd take the property out of the account for your personal use.

My SDIRA I have a traditional and a Roth. If I bought in the Roth, then I'd owe no taxes. If I bought in the traditional then I'd owe whatever my marginal rate was based on the asset value distributed. I'd consider doing partial rollovers from traditional to roth over the next few years to spread the tax hit out over a few years...again details matter, and maybe none of this is a good idea based on your personal tax profile.