Rental property, self-employed, tax

[Evan Williams]

Can a pre-taxed self-employed income (pass-through entity) be used to purchase a rental property? 

[Bill B.]

Also make you don't personal benefit (like using the property) or do any work that would normally be paid for. (You can't manage the property, fix anything, show the property.) any of those actions can cause the entire purchase to be treated as a fully taxable event. If you borrow any money it has to be non-recourse and you'll probably be forced to pay UBIT. You're also changing 15% capital gains income in to normal income at a presumably higher rate. So probably buy for cash flow instead of appreciation and you're also losing out on the depreciation deduction so make sure you have to do it in an IRA. You're putting a tax advantages investment inside a tax advantage account usually not ideal.