All Forum Posts by: Don Ireland

@Don Ireland: Great plan of action.. some points to remember and then appropriately act on:

(1) Mortgage to acquire --- must be non-recourse (i.e. you cannot guarantee the loan).

(2) At 70 1/2 your ROTH 401K is subject to Required Minimum Distribution (RMD), so either adequate cash has to be maintained for such in the account, or as William Morrison suggested take a distribution in kind. Please do note that for this you would have to do a formal fair market appraisal on an annual basis of the real estate that is held in the ROTH 401K.

(3) You do have the option to rollover your ROTH 401K to a ROTH IRA to prevent the RMD, but you may want to make sure that either the loan is paid off or the loan has the appropriate documentation to enable such a transfer. A transfer to the ROTH IRA may (but in this case may not) could activate UBIT (unrelated business income tax)

(4) In case of death, the ROTH 401K and the ROTH IRA appropriately transfer to the beneficiaries and then the appropriate RMD's begin (which requires a fair market appraisal on an annual basis). If there is an active loan this could trigger UBIT for a ROTH IRA (the code is not very clear on this one).

You have a good strategy, work with qualified and knowledgeable professionals who can assist and guide you through all the implementation steps.