My experience tells me that I must compute the gain (%) and report that percentage of the principle as a taxable gain + the interest received AS I RECEIVE IT IN PAYMENTS each year.

Otherwise, I believe it turns into income to you if you leave your current employer and becomes immediately taxable, in addition to other penalties.

It reduces their basis (cost) of the REIT shares and is not taxable unless and until they sell their shares.

Also, you should be getting K- 1 every year, regardless of what happens to the money because that is a taxable income.

The amount of depreciation (along with operating expenses and interest payments) can be deducted from the actual rents received to get your taxable income.As you take this depreciation, the basis is reduced.

These issues are identified herein as: (1) unrelated business taxable income (“UBTI”); and (2) unrelated debt-financed income (“UDFI”). 

Another alternative would be converting your 403B into Roth, which is a taxable event, and then you could combine it with your Roth IRA. 

UDFI is a type of UBTI (Unrelated Business Taxable Income) and is assessed when your IRA purchases investment property using leverage.

If an IRA can be drawn down anyway at 59 1/2 I wonder about the differences and troubles vs using cash from a taxable account and/or financing.Look forward to your insights, and anybody else that wants to chime in.Thanks.Tom

We have business license taxes here as well, gross receipts taxable are to your business entity, the gross receipt amounts aren't effected by segregating them in separate accounts.