All Forum Posts by: Eric Maertens

Hi BP, Should I cash out 401k to pay for finishing basement for a rental property? A couple facts. I’m 30, I have enough in 401k to cover finishing cost(45k) after all penalties. Basement will rent for conservative 1200 a month. After running the numbers it seems like a no brainer but I need advice. Additionally, is the money spent on the finishing cost tax deductible so that my actual cost of taking 401k out would only be 10% penalty? Thanks

Hi BP, Should I cash out 401k to pay for finishing basement for a rental property? A couple facts. I’m 30, I have enough in 401k to cover finishing cost(45k) after all penalties. Basement will rent for conservative 1200 a month. After running the numbers it seems like a no brainer but I need advice. Additionally, is the money spent on the finishing cost tax deductible so that my actual cost of taking 401k out would only be 10% penalty? Thanks

Hi BP, My question is should I cash out my 401k to invest in a basement rental at my current residence. I am 31 yes old, I have a 30yr VA loan on the property and finishing the basement will cost an estimated 50k which I was planning on using my 401k for. I have run the numbers on leaving my 401k invested vs the rental and the rental makes more sense. Conservative monthly rent is 1200$ a month. Last question, I know you have to pay taxes and a penalty on taking out early, but if the money is spent on an investment property (basement) would that money be deductible? So just the 10% penalty would be assessed?