Contribute to a Roth SDIRA with rental income only.

[Corey G.]

So I quit my job in 2022 and so for the last year I have been working strictly on my properties. I never bothered with logging my time (because it was a hassle and I didn't think it would be much benefit) but now I'm realizing that I can't contribute to my Roth SDIRA anymore because all my income is passive. I probably would quality for being a trade or business with the amount of hours I put in remodeling and such but since I don't have logs for the past 4 years (since I've had my rentals for much longer), it would be at least 3 to 4 more years before I'd qualify for that. Or I'd have to try and work up my log hours from home depot & gas station receipts which would be a big pain in the butt. I've heard about people creating Property Management businesses and billing their properties for service... which seams easier but I know that subjects me to self employment tax (but does open up other possibilities of self employed 401ks and such). Anybody have any other suggestions or experience with going the management route? 

[Brett Synicky]

@Corey G. you’re on the right track.  You can definitely create a pm company like you mentioned.  It isn’t hard to qualify for a solo 401k.  Drive Uber, door dash, sell things on eBay/amazon.   Network marketing.   There are many benefits to solo 401ks over sdira, one of the biggest being the high contribution limits so with my examples you likely won’t make very much but for 2024 you can contribute up to 100% of what you make up to $23,500 and since you don’t need the money to live on this would be a good way to add more money to a Roth solo.