Use funds from IRA to do Lonnie Deals? - Posted by drew


#1

Posted by Bud Branstetter on December 07, 1998 at 11:47:46:

You can buy commercial liability policies to protect the assets in the IRA. I’m not sure of the cost/risk reward for a small IRA.


#2

Use funds from IRA to do Lonnie Deals? - Posted by drew

Posted by drew on December 06, 1998 at 22:00:54:

First, let me thank everyone that provides the valuable guidance and encouragement on this site. Second, here is my question:

I have about $15K in an IRA and am considering withdrawing it to start a corporation, get appropriate licenses, and start doing a couple of Lonnie Deals. I will get hit with the 10% penalty, but I will only be in the 15% personal tax bracket for 1998 (a long and winding story) which eases the pain a bit. After taxes, incorporating, and licenses, I should have about $10K to work with. Earning 75% on $10K will certainly eclipse making 15% on $15K in a short amount of time (about a year). Does this make sense or should I go about this in a different way? All of your comments are appreciated.

Thank You,
drew


#3

Best yet: self-directed Roth IRA - Posted by HR

Posted by HR on December 07, 1998 at 07:42:00:

Drew,

Why not buy mhs in self-directed Roth IRAs? Unless you need the money now to live on, why not transfer those retirement accounts to new Roth accounts, which will generate tax free (!) funds. Go to www.money.com or other money sites to learn more about the Roth. Click on the entrust banner above to learn more about self-directed funds. Self-directed funds basically let you buy what you direct it to buy, like real estate. Not all funds can do this; there is a lot to look into. But start! It could be a great angle for you.

Another advantage if you act FAST: conversion of traditional iras to roths in 1998 only can space the tax payment over the next four years. So if you act fast, you could take an even smaller tax hit.

I’m looking at doing this as well.

Good luck!

HR

Ps. I do not work for or have any relationship with Entrust.


#4

Self Directed - Posted by David Alexander

Posted by David Alexander on December 06, 1998 at 23:09:48:

Why not switch your funds to a self directed IRA
then your profits are tax deferred.

David Alexander


#5

Re: Best yet: self-directed Roth IRA - Posted by drew

Posted by drew on December 07, 1998 at 09:58:00:

HR - thanks for the response. I really like the idea of using a self directed IRA, but can’t seem to get around the liability issue without a corporation. There is also a property in Las Vegas that I should move into a corporation which is why I’m leaning that way.

I also haven’t found a way to deduct expenses (advertising, fix-up, car, …). The expenses may be small potatoes versus the gains from being in an IRA, but that liability issue is haunting me. Do you know of any way to address this issue and still use a self directed IRA?

Thank You,
drew