Roth Guidelines for my investment

You asked: If my PPT options a note with the intent of finding another buyer, how much if any earnest $$ does the PPT have to put down to be in compliance with the ROTH guidelines? The ROTH is not keeping the tale of the note.   I assume the same pertains for a real estate transaction. My answer:   Thanks for the question. Unfortunately, there is no good answer.   I would be a little concerned with your verbiage below, … Continue reading

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Roth Conversions and their 5 year clock

You asked:   “I converted $18,000 in a traditional IRA to a Roth IRA in 1998. I also made $20,000 in contributions over the years 1998-2010. Last year I took a distribution of $38,000. I am under age 59 1/2.Do I have any taxes or penalty on this withdraw?”   My answer:   No, as you describe the situation. Regular contributions come out first, followed by Roth conversions, and finally profits. The rules for calculating any taxable amounts from a … Continue reading

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UBIT? You Bet!

Questions: I think the answer to my question. Does Arkansas charge tax on UBIT and UDFI? in the book 2009 Multistate Guide to Regulation and Taxation of Nonprofits By Steven D. Simpson. Which is found in full online through google books at: https://books.google.com/books?id=KE5dVpNcWkwC&pg=SA3-PA9&lpg=SA3-PA9&dq=Section+512+of+the+Internal+Revenue+Code+arkansas&source=bl&ots=YFNc-ZE7U0&sig=PpYxNwFJEhq5fd920ha18OXLFkw&hl=en&sa=X&ei=ItEKVdmUOcSwggSMiIOoBQ&ved=0CC8Q6AEwAw#v=onepage&q=Section%20512%20of%20the%20Internal%20Revenue%20Code%20arkansas&f=false It says that Arkansas does not have IRS code sections 501-529, but that it does tax unrelated business income on income attributable to Arkansas. Since UDFI is Section 514 I assume that there is no state income … Continue reading

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Coverdell ESA & Partnering Accounts

You asked:   “Quincy: RE: A Coverdell ESA, if an individual has contributeed to a Coverdel on behalf of his child for the last 3 years, $2,000 each year for a total of $6,000, can he withdraw the $6000 in contributions, leaving the accumlated gains? If so are there any tax related consequences? 2nd question: can my ROTH and HSA partner to buy or option a note and share in the profits. Or can say the ROTH buy option and … Continue reading

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Seller Financed Real Estate

You asked:   “Hey Quincy – wife and I met you on IRA Fun Cruise in January. This is a rookie question. Sceanario: we buy an investment property through one of our Roth self directed IRAs. We plan on putting 20K down and getting seller financing for the balance of purchase price. The property is tenant occupied with a Property Manager in place. The property is currently in a land trust and I believe seller wants to use a land … Continue reading

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Flipping Real Estate Options in an SDIRA

You asked:   ” Hi,   Quincy Long said in the following article* that you can flip real estate options in a SD-IRA.  Can this be done multiple times per year without being classified as a “dealer” ?  Because it’s options and not physical real estate would the “dealer” status not apply ?   Also, if the option flipping is done frequently, would I incur UBIT because I’m carrying on an “active business” ?   Are there ways to avoid UBIT … Continue reading

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U. S. Supreme Court Rules that Inherited IRAs Are Not Protected In Bankruptcy

U. S. Supreme Court Rules that Inherited IRAs Are Not Protected In Bankruptcy

                  On June 12, 2014, the United States Supreme Court ruled in a unanimous opinion that inherited Roth and traditional IRAs are not protected from creditors under the “retirement funds” exemption in the U.S. Bankruptcy Code.  The case is Clark v. Rameker, Trustee, 573 U.S. ____ (2014).   In 2001, Heidi Heffron-Clark inherited a traditional IRA worth approximately $450,000 from her mother, Ruth Heffron.  Ms. Heffron-Clark elected to take monthly distributions from the account.  In 2010, Ms. Heffron-Clark and … Continue reading

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Using the same Trustee for various entities

Using the same Trustee for various entities

Hello Quincy, It was great spending time with you on the cruise.  We all enjoyed it immensely.  Can’t wait for the next one. Question below:  Names have been changed to protect the innocent. 1) Ann is trustee of our land trust for our LLC in Georgia (normal entity not in our Roth). Can we also do transactions with Ann in our Roth IRA? 2) Can we do transactions with the same person/entity inside and outside of the Roth? Thanks.   … Continue reading

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Using IRA to invest in Laundromat Business?

Using IRA to invest in Laundromat Business?

Question: I appreciate if you can answer my two questions below: 1- Can I use my IRA and invest in a Laundromat business as my down payment and borrow rest from SBA? 2- Can I buy a 2nd home with my SDIRA? Answer: 1) Not directly in the IRA, no.  Your IRA is to be invested for your future, not for your current benefit (or to benefit any other disqualified person).  Some people say that you can set up a … Continue reading

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MAJOR CHANGE in interpretation of 60 day rollover rule

MAJOR CHANGE in interpretation of 60 day rollover rule

UPDATE   The Tax Court ruled in the case of Bobrow v. Commissioner, T.C. Memo 2014-21, that the one-time per 12 calendar month 60-day rollover rule applies to ALL of the taxpayer’s IRAs, and not to each IRA separately.  This is in direct conflict with information contained in IRS Publication 590 and in Proposed Regulation 1.408-4(b)(4)(ii). UPDATE:  In IRS Announcement 2014-15, the IRS has indicated that it will withdraw Proposed Regulation 1.408-4(b)(4)(ii) and will interpret the 60-day rollover rule in … Continue reading

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