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Updated about 9 years ago,
Setting up a SEP that can be used to invest in real estate ?
Ill give a bit of background before I pose my question.
I am 25 years old and the only reason I am interested in opening a SEP is to lessen my tax burden each year. I am full time Realestate investor and Flipper. This last year has been highly profitable with our flips Which has lead me to SEPs.
The thought of locking away thousands of dollars each year that can not be removed/ used in RE with out penalty until i'm 59.5 years old does not sound appealing to me at all.
So my question is if I were to open a SEP can I then Invest that money into RE in some capacity? Even if it meant not investing in my own businesses? My optimal example would be contributing each year to this SEP Then lend this money back to my business at a reasonable interest rate. From my research I believe the above example is not legal. An alternative for me would be to contribute to the SEP then lend that money to other investors as a passive private lender.
I will be getting my CPA to weigh in on this but before I do that I like to be fully informed.
Any input is greatly appreciated!