Originally Posted by
Bucking Bar
… and I would add, for a Delta pilot there are many advantages to setting this up in a self-directed IRA.
Agreed, but there are limitations on leverage within an IRA. You either have to be an all cash investor or be in a position to use non-recourse financing and pay UBIT on the leveraged portion. Also in dollar terms, it can be difficult to get enough money into a self directed IRA.
Originally Posted by
Bucking Bar
In 2015 my sort term gains were taxed at 51% after AMT, State and investment taxes specific to 1099 income from the company that runs the properties for me.
The real estate business was only ever intended to be a supplement to retirement. It makes sense to roll all of this forward in the IRA and tax it when you retire.
If you are talking about sizable holdings, there may be some advantage to structuring the deal so that gains will fall under a carried interest provision vs pass through income. Don't get advice on this from APC! Also under the new tax code, there are reductions on taxes for pass through income via a K-1 from a Parthership / LLC. I'm not sure if rental income on a 1099-MISC receives the same treatment.