Sam Miller
Starting from scratch with a Self Directed IRA or Solo 401(k)-
8 September 2017 | 8 replies
@Sam MillerFollowing are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k SimilaritiesBoth were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions; andBoth are prohibited from investing in assets listed under I.R.C. 408(m).The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (Checkbook IRA) must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2016, the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)
Michael Ndjondo makadi
Can trip expenses to go buy a first house be tax deductible?
9 September 2017 | 20 replies
You can't just say you are a business- you have to be open, have inventory, operating ect....with REI it typically means having purchased first rental, flip, done wholesale ect
Jacob Barnhart
Property is built like a duplex, but only 1 meter & address
7 September 2017 | 0 replies
The problem is that none of the units utilities are submetered, I'm assuming it's zoned as SFR, and it only has one mailing address and mailbox.
Dan Graves
LLC question regarding partnership
26 September 2017 | 17 replies
My question is in regards to how LLC's are typically structured when there's more than one "owner" of the property.
Jen R.
Show me your bathroom tile pictures!
12 September 2017 | 17 replies
I have designed a few public restrooms where I typically use concrete block and stainless steel.
Luke Carl
Two 1031 Exchange Questions....
11 September 2017 | 14 replies
So if I have a project that is funded by cash or loan and can be finished before the 6 month time frame can you then utilize the proceeds from the previous sale to in essence "refinance" the project and avoid capital gains?
Account Closed
Using an ICO for buying real estate or seed capital
17 November 2018 | 11 replies
I had read about utility tokens but had not heard of security tokens .What would you say would be the cost to launch an ICO specifically a real estate one ?
Ryan Swan
Multi Family Appraisal
9 September 2017 | 8 replies
If you "jack" the rent up (even if you find a tenant willing to pay it), typically the appraiser will not give credit for additional value above and beyond what market rents would determine.
TJ Addison
owner finance question
8 September 2017 | 5 replies
Not always, but typically owner financed properties are over priced.
Anshu Sanghi
Retain SFH or sell and invest somewhere else for higher return
11 September 2017 | 6 replies
Per the chart below, we typically have a huge run up every decade.