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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: buying rentals using self directed ira Posted by AquariusDawnCA on May 31, 2009 at 6:04 PM In Reply to: buying rentals using self directed ira posted by the_saint on May 31, 2009 at 4:57 PM I am not a legal nor a tax advisor. 1. Even if you pay cash for a rental, you can still depreciate. If you do not want the expense of a CPA, find an enrolled agent, they are cheaper (very affordable) and up on tax code. If you own the property, you can depreciate it. 2. The amount in your IRA does not affect how much you spend in any given area of a transaction, tax code does not control that. But if you only have $100K be real careful, and when purchasing keep at calculated amount reserved from you IRA for all expenses, ie closing costs, repair costs, management of prop. costs, holding costs, commission expenses if any, etc. 3. As far as contributions, not sure. But, your rental income and any other income from your Self-Directed IRA must go back into the account. 4. A lot of folks form an LLC for their Self-Directed IRA, even though this is not necessary, the legal framework gives some folks peace of mind. Search the web: Guidant, Entrust, and many others have a wealth of FREE info. In my opinion, ENTRUST is fee crazy. GUIDANT is smooth for LLC set-up, about $3,000 should do it and you can chat with an attorney as part of the fee. Be careful whatever you do, the IRS would love for you to screw-up so that they can take your cake and eat it too! I use to date a career IRS guy, so I can say that! LOL! Sorry to hear that you are afraid to open your statement, just know that a lot of good people are in your situation, a crying shame that our WALLSTREET HARVARD EDUCATED MOODY MORONS gave us the triple A rating, thinking A was for A__! : a couple of questions, r/e pros, before i start or open my : own sdira. i can't bear opening my 401K monthly statement so i : decided this might be the way to go since i already have : rentals outside of california. thank you very much for all the : info you can share. : 1. if my sdira is paying cash for a rental, i can't claim the : depreciation expense on my income tax returns, right? if : not, who claims it then. : 2. if my sdira is $100k, up to how much am i allowed to : use for purchase and closing costs? are reserves required by the : irs even if i'm buying cash? : 3. can i make monthly contributions to the sdira just like : one does with one's 401K. : 4. am i allowed to put the property my sdira owns in a trust : where I'm the trustor and the sdira is the beneficiary? or : does it even make sense to do that? : thanks again for helping out a newbie... Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : I am not a legal nor a tax advisor. : 1. Even if you pay cash for a rental, you can still depreciate. : If you do not want the expense of a CPA, find an enrolled : agent, they are cheaper (very affordable) and up on tax : code. If you own the property, you can depreciate it. : 2. The amount in your IRA does not affect how much you spend : in any given area of a transaction, tax code does not control : that. But if you only have $100K be real careful, and when : purchasing keep at calculated amount reserved from you IRA : for all expenses, ie closing costs, repair costs, management : of prop. costs, holding costs, commission expenses if any, : etc. : 3. As far as contributions, not sure. But, your rental income : and any other income from your Self-Directed IRA must go : back into the account. : 4. A lot of folks form an LLC for their Self-Directed IRA, : even though this is not necessary, the legal framework gives : some folks peace of mind. Search the web: Guidant, Entrust, : and many others have a wealth of FREE info. In my : opinion, ENTRUST is fee crazy. GUIDANT is smooth for LLC : set-up, about $3,000 should do it and you can chat with an : attorney as part of the fee. : Be careful whatever you do, the IRS would love for you to screw-up : so that they can take your cake and eat it too! I use to date a : career IRS guy, so I can say that! LOL! : Sorry to hear that you are afraid to open your statement, just know : that a lot of good people are in your situation, a crying shame : that our WALLSTREET HARVARD EDUCATED MOODY MORONS gave us the : triple A rating, thinking A was for A__! : : : a couple of questions, r/e pros, before i start or open my : : own sdira. i can't bear opening my 401K monthly statement so i : : decided this might be the way to go since i already have : : rentals outside of california. thank you very much for all the : : info you can share. : : 1. if my sdira is paying cash for a rental, i can't claim the : : depreciation expense on my income tax returns, right? if : : not, who claims it then. : : 2. if my sdira is $100k, up to how much am i allowed to : : use for purchase and closing costs? are reserves required by the : : irs even if i'm buying cash? : : 3. can i make monthly contributions to the sdira just like : : one does with one's 401K. : : 4. am i allowed to put the property my sdira owns in a trust : : where I'm the trustor and the sdira is the beneficiary? or : : does it even make sense to do that? : : thanks again for helping out a newbie... 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