Menifee, CA · Member since 2016 · 23 posts · 1 vote
I am looking to family members to help finance the down payment of my first flip and possible future investments. I want to know if there are any specific steps or things I/they need to do in order to avoid paying taxes. I'm in Menifee California, not sure if there may be state specific rules.
They may be pulling the money from stocks, IRA, 401K or savings. Loans ranging from $5,000-$100,000
How do I avoid taxes for receiving the money since I am just immediately putting that money into a property/investment?
How can they avoid paying taxes for removing/cashing out the money from stocks, bonds, and savings because they are loaning it?
I know 401Ks and IRAs are fairly easy to move back and forth to real estate. What is this process?
Thank you in advance! Please feel free to ask any questions that may help determine my best course of action.
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
9y
Still in the learning process on the IRA stuff but if they had a SDIRA or solok a family member would be prohibited to loan from those accounts. Savings would be a different story. You and them would only pay tax on the profits and not the loan.
I am looking to family members to help finance the down payment of my first flip and possible future investments. I want to know if there are any specific steps or things I/they need to do in order to avoid paying taxes. I'm in Menifee California, not sure if there may be state specific rules.
They may be pulling the money from stocks, IRA, 401K or savings. Loans ranging from $5,000-$100,000
How do I avoid taxes for receiving the money since I am just immediately putting that money into a property/investment?
How can they avoid paying taxes for removing/cashing out the money from stocks, bonds, and savings because they are loaning it?
I know 401Ks and IRAs are fairly easy to move back and forth to real estate. What is this process?
Thank you in advance! Please feel free to ask any questions that may help determine my best course of action.
Jason,
Loans are not taxable. if they are pulling money out of those accounts the tax problem is their own. They have to decide if its worth the tax bill/penalties. Many can also take loans from their 401k plan of 50% of the balance up to 50k. This does not apply to IRAs. Are you giving them equity or are they just loaning the funds?
Menifee, CA · Member since 2016 · 23 posts · 1 vote
9y
@Steven Hamilton II I am still trying to work out if they just want to loan the money or be an equity partner. I'm trying to evaluate what possibilities are best for all parties.