Because of how these types of income are classified by the IRS, they are also taxed differently.  

If I withdraw it, I have to pay income taxes plus the 10% penalty to the IRS for early withdrawal.I figure I can turn that into 2 or 3 down payments on SFR's that will cash flow about $400 to $500 per month each or perhaps look into a duplex or quadplex...I haven't run numbers on what those cash flow.Any advice or angles I'm not seeing with this.  

Long Distance TravelIf you travel overnight for your rental activity, you can deduct your airfare, hotel bills, meals and other expenses.Be aware that IRS auditors closely scrutinize deductions for overnight travel—and many taxpayers get caught claiming these deductions without proper records to back them up.

easy....35 properties. quicken property manager. digitally scan everything, throw away receipts, back up to another drivemy accountant deals with the IRS.

Specifically, I'm looking at a setup very much like what is described in This IRS Publication In fact, this wording in the IRS publication is effectively (similar, but a little different)what we are planning to do: "Development Corp., a real estate developer, is a partner in a low-income housing partnership.

This means you can take out your retirement money without penalty, and because Roth earnings are tax-free, you'll have no IRS bill, either.If, however, you opened your Roth IRA less than 5 years ago, the withdrawal is an early distribution.

I also do not want to be liable for any gift tax to the IRS! 

: The IRS Finally Figures Out The Real Estate Professional RulesSome important points made here that are relevant if you are a single property investor vs a multiple property investor and how you need to do "grouping elections".I'm taking note of the Real Estate Professional because it is a way to get around depreciation caps on personal earnings with passive income.  

Just hopping out of one career and into another.

You ought to get your financing figured out before you start making offers.If you are in any doubt about with the involve  with the IRS..