Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.
2023 was a challenging year, but I managed to make $250,000 before taxes as the sole breadwinner and head of household. It's a good starting point, but I'm always looking ahead on how to improve
One issue you did not raise re the loss of depreciation for a rental property as a reason not to buy in an IRA is that if you sell the property the depreciation is taxed as recapture and taxed at a much higher rate than cap gains. So all appreciation is not cap gains. I think this is a huge issue why depreciation not as valuable as people think when dealing with properties you might eventually sell.
Thank you for your comment. In an IRA, assuming no debt financing, there is not capital gains or recaptured depreciation upon the sale of a rental property. It sounds like you are commenting that this is another benefit of owning property in a Roth IRA. Feel free to reply back if that is the case. We did create another video specific on this topic, which can be found here. th-cam.com/video/fBOrbA6stN4/w-d-xo.htmlsi=NYutmCA4gZh-CTQs.
If someone does a 72t yearly distribution from a self directed Roth IRA, does the process of doing the 72T from the account impede the account owner from continuing to invest out of the IRA, or is the account locked with its current investments due to the obligatory yearly distributions from said account? If a house purchased in a Roth IRA, earlier in life, is removed (distributed) out of the Roth IRA at its current value at 59 1/2 (or after), if this house is then used as the IRA owners primary residence, and the house is sold after 2 years for a profit, is said profit still tax free? If a Roth IRA owner dies and gives said IRA to his children, do they have to draw said IRA down evenly over the next 10 years or can they wait till the 10th year and remove all at once, since it will be tax free anyways?
Thank you for your question. You can certainly still take 72T yearly distributions while investing in alternative assets like real estate. You will need to make sure you have enough cash in the account to satisfy these distributions and pay for any expenses related to your investment property in your IRA. It appears you are asking about using the IRA funds to purchase a residence you would be living in or a family member would be living in? The tax code does not permit you to use IRA investments for personal use, therefore, the IRA would be for investment assets only. When the account owner dies, and account is left to someone that is not a spouse and is more than 10 years younger (i.e. child), then the entire account does have to be distributed within 10 years.
Hello, yes, you can contribute to both a SEP and Traditional IRA, providing you have enough earned income to support both contributions. That said, you should speak with your CPA or tax advisor as your Traditional IRA contribution might be considered a non-deductible contribution, meaning you don’t get a deduction for the contribution. Doesn’t mean you cannot contribute, just means you don’t receive a deduction. Eventually when you withdrawals funds, on a pro rata basis that amount is not taxable.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.
2023 was a challenging year, but I managed to make $250,000 before taxes as the sole breadwinner and head of household. It's a good starting point, but I'm always looking ahead on how to improve
This was a great episode, very informative
Thank you for this information
One issue you did not raise re the loss of depreciation for a rental property as a reason not to buy in an IRA is that if you sell the property the depreciation is taxed as recapture and taxed at a much higher rate than cap gains. So all appreciation is not cap gains. I think this is a huge issue why depreciation not as valuable as people think when dealing with properties you might eventually sell.
Thank you for your comment. In an IRA, assuming no debt financing, there is not capital gains or recaptured depreciation upon the sale of a rental property. It sounds like you are commenting that this is another benefit of owning property in a Roth IRA. Feel free to reply back if that is the case. We did create another video specific on this topic, which can be found here. th-cam.com/video/fBOrbA6stN4/w-d-xo.htmlsi=NYutmCA4gZh-CTQs.
If someone does a 72t yearly distribution from a self directed Roth IRA, does the process of doing the 72T from the account impede the account owner from continuing to invest out of the IRA, or is the account locked with its current investments due to the obligatory yearly distributions from said account? If a house purchased in a Roth IRA, earlier in life, is removed (distributed) out of the Roth IRA at its current value at 59 1/2 (or after), if this house is then used as the IRA owners primary residence, and the house is sold after 2 years for a profit, is said profit still tax free? If a Roth IRA owner dies and gives said IRA to his children, do they have to draw said IRA down evenly over the next 10 years or can they wait till the 10th year and remove all at once, since it will be tax free anyways?
Thank you for your question. You can certainly still take 72T yearly distributions while investing in alternative assets like real estate. You will need to make sure you have enough cash in the account to satisfy these distributions and pay for any expenses related to your investment property in your IRA. It appears you are asking about using the IRA funds to purchase a residence you would be living in or a family member would be living in? The tax code does not permit you to use IRA investments for personal use, therefore, the IRA would be for investment assets only. When the account owner dies, and account is left to someone that is not a spouse and is more than 10 years younger (i.e. child), then the entire account does have to be distributed within 10 years.
Can you touch on the difference between and IRA and a Sep IRA
Hello, learn more here: ow.ly/zvz650Qlx9N
Can i contribute to both SEP IRA and Tradiontal IR in the same year if i am the only owner of bussiness and employee with w2?
Hello, yes, you can contribute to both a SEP and Traditional IRA, providing you have enough earned income to support both contributions. That said, you should speak with your CPA or tax advisor as your Traditional IRA contribution might be considered a non-deductible contribution, meaning you don’t get a deduction for the contribution. Doesn’t mean you cannot contribute, just means you don’t receive a deduction. Eventually when you withdrawals funds, on a pro rata basis that amount is not taxable.
Thank you. Good information.