Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

My friend had 250k in a 401 account of a company she was…

Hello, My friend had 250k...
Hello, My friend had 250k in a 401 account of a company she was working in. Now she left the company and the 401 funds is available for self directed IRA through which she is able to put this funds in real estate IRA. She saw a rental town home for 350k, so she is short of 100k within the 401 to be able to buy the rental TH under a self directed estate real estate investment. Is there any way that the 100k can be loaned to the IRA so the TH can be purchased and rented within the self directed IRA. Thanks
Show More
Show Less
Ask Your Own Tax Question
Answered in 13 minutes by:
3/28/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,255
Experience: Taxes, Immigration, Labor Relations
Verified

The issue that assets in the IRA may not be used as collateral...

That actually means - the property she will purchase within her self-directed IRA may NOT have a mortgage.

However - that is possible to have that self-directed IRS will be a partners in the LLC - and another partner will contribute additional money.

Let me know if you want to consider that approach.

Ask Your Own Tax Question
Customer reply replied 4 months ago
is this a common approach, can a famly member be partner within the LLC to provide the balance amount as cash, like spouse?

First of all - using a self directed IRA is not very common....

But using a partnership as investment is ever less common.
You might want to communicate with the administrator (or prospective administrator) of her self directed IRA - as they may limit some investment options.

In general - ANY person or entity may be a partner.

That includes herself - she may be a partner and her self directed IRA may be another partner.

Complications will be that ALL distribution must be prorated exactly according to capital contributions to avoid prohibited transactions.

Another issue will be that the partnership will be required to file the tax return and issue K1 to reach partner.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,255
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 4 months ago
thanks, ***** ***** helpful
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,255
33,255 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I have a question about what is considered a 'self directing
Hi Pearl. I have a question about what is considered a 'self directing IRA' or allowable retirement investment. I have a 401K that my employer has stopped contributing to and I'd like to convert it to… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,381 satisfied customers
I have a question on checkbook IRA's. I was planning on
I was planning on creating a multi-member LLC in New Jersey with two members, my 401K Retirement Fund (65% of the funds) and my wife's SEP-IRA (35% of the funds). My wife and I would be listed as managers of the LLC on a 50/50 % ownership. All this to be under a Checkbook Self-Directed IRA for the main purpose of investing in real-estate backed loans. Is this possible? If not, how should I proceed? I was planning on creating a multi-member LLC in New Jersey with two members, my 401K Retirement Fund (65% of the funds) and my wife's SEP-IRA (35% of the funds). My wife and I would be listed as managers of the LLC on a 50/50 % ownership. All this to be under a Checkbook Self-Directed IRA for the main purpose of investing in real-estate backed loans. Is this possible? If not, how should I proceed? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
If I establish a self-managed IRA and use its funds to
If I establish a self-managed IRA and use its funds to purchase a two-family unit/house, manage this rental property but never reside in it (rent it to unrelated tenants), would it be in compliance wi… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
Need a CPA here is my question in UBIT I have a self directed
Need a CPA here is my question in UBIT I have a self directed IRA than owns a house i paid 200k for the land from my IRA selfdirected trust then got a 350k non recourse morgage that we have if we sell… read more
R. Klein, EA
R. Klein, EA
Tax Advisor
Master\u0027s Degree
3,104 satisfied customers
I have a situation where my I am about to leave one employer
I have a situation where my I am about to leave one employer and start work with another employer. I have money in a 401(k) which I need to take with me. I would like to put the money in a self direct… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
This is quite a few questions so I am willing to pay a premium
This is quite a few questions so I am willing to pay a premium for the answers. We have rolled our SD IRA to an Solo 401K. We are planning on buying realestate rentals with the funds. My questions are… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
This is not a duplicate, do not closed I havr read quite a
This is not a duplicate, do not closed I havr read quite a bit about self directed 401k IRA LLC, or self directed 403b . First I want to make sure I can just put a part of my lump sum rollover into an… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,255 satisfied customers
This is not a duplicate, do not closed I havr read quite a
This is not a duplicate, do not closed I havr read quite a bit about self directed 401k IRA LLC, or self directed 403b . First I want to make sure I can just put a part of my lump sum rollover into an… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
Bill, I havr read quite a bit about self directed 401k IRA
Bill, I havr read quite a bit about self directed 401k IRA LLC, or self directed 403b . First I want to make sure I can just put a part of my lump sum rollover into an entity like this . I have 350k. … read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
A taxpayer wants to purchase a residential rental property
A taxpayer wants to purchase a residential rental property using funds from his IRA. Can the IRA own the property? Can an LLC be set up if the property is owned by the IRA?… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
Hi, my friend has a situation that she owes 100k to pay off
Hi, my friend has a situation that she owes 100k to pay off her home and is planning to buy a town home of about 250k as investment. if she recieves 100k from her parents to do what she wants with it,… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
My husband and I want to buy, rehab, and sell small homes as
My husband and I want to buy, rehab, and sell small homes as a retirement business. We want to set up a 401k for the business. Does a real estate flipping business qualify under IRS rules to have a 40… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,255 satisfied customers
With regard to my previous below question, my biggest concern
With regard to my previous below question, my biggest concern is the overhead costs or home improvements that would come up in future. What if my 401 does not have enough funds for these expenses, bec… read more
CGCPA
CGCPA
Owner
Bachelor\u0027s Degree
3,815 satisfied customers
Hi, I have a self directed 401 account which is 1/4 of the
Hi, I have a self directed 401 account which is 1/4 of the cost of an apartment. Can I get a loan for the self directed 401 and use the 401 money, and with the total amount buy for example an apartmen… read more
CGCPA
CGCPA
Owner
Bachelor\u0027s Degree
3,815 satisfied customers
Following up on the same issue above , I am planning to use
Following up on the same issue above , I am planning to use cash in my Self directed IRA , 500K to buy my wife interest in an existing rental property that she owns outright , the rental property , cu… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,255 satisfied customers
I currently have too much single family residences (for rent
I currently have too much single family residences (for rent or sale) in my profit sharing plan's portfolio (> 50%). I am 65 years old and am still a working dentist, so, I intend to keep the profi… read more
CGCPA
CGCPA
Owner
Bachelor\u0027s Degree
3,815 satisfied customers
My husband has a TSP through the government and we would like
My husband has a TSP through the government and we would like to investigate rolling the entire amount over into real estate. Are we able to do this without any tax consequences?… read more
Gerri A Harrison CFP EA
Gerri A Harrison CFP EA
Financial advisor/Tax preparer
Bachelor's Degree
86 satisfied customers
Can I use funds in an IRA to make an arms-length loan to an
Can I use funds in an IRA to make an arms-length loan to an unrelated person? Specifically, I would like to "self-direct" funds in a tranditional IRA account as an auto loan, which would then be repai… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,255 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x