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Learning, Sharing, and Teaching => Investor Alley => Topic started by: kenmoremmm on November 18, 2020, 01:11:20 AM

Title: SDIRA Questions
Post by: kenmoremmm on November 18, 2020, 01:11:20 AM
I'm looking at taking some of my invested accounts (Roth, 401k, etc) and using for the sake of an SDIRA that will use a real estate syndication.

Is there an advantage towards using a pre-tax vs post-tax account for such an investment? I know that one of the big plays with the syndication is bonus depreciation that occurs in the first year due to segregation studies. However, this feature wouldn't be advantageous (that I know of) whilst in an SDIRA.

Also, one of the syndicators I spoke with mentioned that if you are to have more than a few offerings, that it may be best to set up the account with the 3rd party custodian, but then migrate the account over to your own trust that you would hold at your personal bank. He thought it would be easier to manage/view accounts in this form, and that fees would be lower.

Appreciate the feedback!
Title: Re: SDIRA Questions
Post by: Proud Foot on December 01, 2020, 01:38:26 PM
When you say pre-tax vs post-tax do you mean Traditional vs Roth? If so then Roth would be your best choice if you were wanting to hold real estate/illiquid investments. This is so you don't run into issues with distributions as Roth IRA's don't require RMD's.

Title: Re: SDIRA Questions
Post by: kenmoremmm on December 01, 2020, 02:19:13 PM
yes, Trad vs Roth.

i'm not certain, but it seems like UDFI, Unrelated Debt Finance Income, might come into play. when leverage is used a portion of the return (income & or gain) that is attributable to the leverage is considered taxable income.  generally a 990T filing is required for the retirement account.

i question if a Roth still makes sense with this information.