Modeling Agency Inc. | Self Directed IRA

Modeling Agency Inc. sheds some light on the fact that if you sell real estate within a regular self-directed IRA, any appreciation on the property will ultimately get taxed as ordinary income when you take withdrawals, at rates currently up to 35%. But if you set up a self-directed Roth IRA all your property gains and withdrawals will be tax-free. That's assuming, of course, that you have gains. There's no guarantee that the real estate market won't tank again. And rising property taxes, unplanned maintenance costs, and deadbeat tenants could also ding your returns. The upside of real estate is big but so are the headaches.

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