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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Self Directed IRA and Flipping... Capital Gain??? Posted by Ed on November 08, 2009 at 2:58 PM In Reply to: Re: Self Directed IRA and Flipping... Capital Gain??? posted by Peter on November 06, 2009 at 7:07 PM Self Directed IRAs not really scrutinized by IRS now, but if it were to be, the practice of flipping homes within your IRA would subject you to UBIT, IMO. The ROTH is still subject to UBIT. So flipping in Roth the same as flipping in traditional. Best scenario would be to have a financial friend (who you have no non-IRA deals with)set up a company to do your flips. Have your IRA be the lender and take the lion share of the profits. I believe this sort of situation would be less likely to be scrutinzied. For subject to deals, the ROTH 401K does get around the taxes due to debt leveraging which face the IRAs. : UBTI - a timely discussion. What about the following plan: : - buy property for 100k with self-directed IRA : - convert IRA to ROTH-IRA (January 2010 the AGI restrictions are dropped) : - for the purpose of the conversion, the property is valued 100k : - have 3 years time to pay income tax on the conversion : - sell property for 200k and pay no taxes on the gain : - at age 60, withdraw tax free : It is my understanding that ROTH-IRAs are exempt from UBTI. Correct? : And what about my plan above? : Thanks, Peter Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Self Directed IRAs not really scrutinized by IRS now, but if it were to be, the practice of flipping homes within your IRA would subject you to UBIT, IMO. : The ROTH is still subject to UBIT. So flipping in Roth the same as flipping in traditional. : Best scenario would be to have a financial friend (who you have no non-IRA deals with)set up a company to do your flips. Have your IRA be the lender and take the lion share of the profits. I believe this sort of situation would be less likely to be scrutinzied. : : For subject to deals, the ROTH 401K does get around the taxes due to debt leveraging which face the IRAs. : : : UBTI - a timely discussion. What about the following plan: : : - buy property for 100k with self-directed IRA : : - convert IRA to ROTH-IRA (January 2010 the AGI restrictions are dropped) : : - for the purpose of the conversion, the property is valued 100k : : - have 3 years time to pay income tax on the conversion : : - sell property for 200k and pay no taxes on the gain : : - at age 60, withdraw tax free : : It is my understanding that ROTH-IRAs are exempt from UBTI. Correct? : : And what about my plan above? : : Thanks, Peter [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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