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Learning, Sharing, and Teaching => Investor Alley => Topic started by: monothemonkey on December 16, 2018, 07:06:59 PM

Title: Moving TSP to self directed IRA during a low income year
Post by: monothemonkey on December 16, 2018, 07:06:59 PM
I have a very low taxable income this year.  But will have a much higher taxable income next year.  If i want to convert my TSP to a self directed IRA(or Roth?), is it best to do it during this year because of my low taxable income?  I'm a 1099 employee now and will be a W2 employee starting in January. 

Reason for moving funds out of the TSP is that I'd prefer the funds to be put to use now in real estate investing.  I'll be putting more money back into my TSP when I get the W2 job again.  I just want to pull some of the current funds into a self directed fund so that I can purchase an income producing asset.
Title: Re: Moving TSP to self directed IRA during a low income year
Post by: Another Reader on December 16, 2018, 07:31:12 PM
Buying real estate in a self directed IRA is not a good idea.  You lose the tax deductions and the IRA custodians that will do this charge high fees.  You cannot have anything to do with the property.  You can't work on it or use it in any way for personal use or the IRS will invalidate the IRA.
Title: Re: Moving TSP to self directed IRA during a low income year
Post by: jacoavluha on December 16, 2018, 09:44:50 PM
If you have self employment income you can establish a solo 401k and do it there instead of an IRA.

https://www.whitecoatinvestor.com/self-directed-solo-401k-real-estate/
Title: Re: Moving TSP to self directed IRA during a low income year
Post by: Another Reader on December 17, 2018, 04:01:54 AM
If you have self employment income you can establish a solo 401k and do it there instead of an IRA.

https://www.whitecoatinvestor.com/self-directed-solo-401k-real-estate/

That's a sales pitch from someone that sets up "checkbook" IRA's.  Suggest you look into this before writing checks.
Title: Re: Moving TSP to self directed IRA during a low income year
Post by: monothemonkey on December 17, 2018, 11:12:08 AM
Buying real estate in a self directed IRA is not a good idea.  You lose the tax deductions and the IRA custodians that will do this charge high fees.  You cannot have anything to do with the property.  You can't work on it or use it in any way for personal use or the IRS will invalidate the IRA.

My niche is in multi family properties.  I won't be having anything to do with the property other than generating passive income.  Most likely by putting up the earnest money and or part of the down payment to an investor who is doing a value add project with a 2 year or less turn around time.

Does this change the above concerns?