Do any of you use a custodian for self-directed qualfied money. I am looking to lend for rental units using one of my 401ks and was curious to know if anyone has gone through the process before?
I know very little about self-directed IRA’s. The only thing that I know (as a CPA) is that I don’t want to get involved in them. They’re a big hassle, and you constantly have to worry about the self-dealing rules.
However, all IRA’s have to have a custodian, by definition. So I think the question should be “What custodian should I use?” rather than “Should I use a custodian?”
Sorry I couldn’t be of more help.
I have not, though every article I’ve read about it says its a complete pain. Checks have to be sent to the custodian for deposit, countless little rules to follow, etc.
^The lit i have read has highlighted similar problems. Yet, despite this such investing intriques me so i will continue to do my due diligence.
What exactly are you trying to do? Buy a place inside of the IRA and pay the expenses/receive the rent inside of it?
If you do that I don’t think you’d be able to take annual depreciation (or if you do it’s stuck in the IRA), and then you also lose the beneficial rates of capital gains when you sell the house because the IRA will eventually be subject to ordinary income. So really you’re only getting benefit from the deferral of tax.
Bottom line I’m not sure I see a huge advantage without knowing what you’re trying to do.
^I’ll PM you