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15 August 2020 | 12 replies
Following are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k Similarities Both 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;Both 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 (IRA LLC)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.)
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7 September 2016 | 19 replies
Keep in mind, however, that when you pay your 401k payments are made with after-tax funds which means you will have to pay taxes on the interest payments when ultimately distributed form the 401k, usually at retirement.
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31 August 2016 | 24 replies
B and C-class properties are a bit intimidating, but I've been looking into techniques/tips for tenant screening, which should hopefully alleviate the worst of any potential issues.
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16 September 2016 | 12 replies
If you send me your email address I'll add you the the distribution list for the monthly announcement as well.
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31 August 2016 | 2 replies
Also consider using some other techniques like lease options, contract for deed or subject tos where you don't need financing.
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1 September 2016 | 7 replies
Every sale person is different so different techniques are needed.
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2 September 2016 | 6 replies
I love motivational books/podcasts, but at this point I am looking more for detailed case studies/examples/ and techniques.
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2 September 2016 | 5 replies
The Corp reports it as a sale of the property held long term and then the distribution of it as well.
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2 September 2016 | 4 replies
This became popular as the go-to real estate investor DM technique and most investors just follow this because they think it's the best solution.
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4 September 2016 | 2 replies
I hope to be able to gleam from some of your ideas and techniques so that I can utilize tactics in my space of business.The new guy from MD!!