THE NEW TAX LAW SEEMS TO INDICATE THAT PROFITABLE RENTAL ACTIVITY IS QUALIFIED BUSINESS INCOME. DOES THAT MEAN that a 90 year would be able to invest in a ROTH IRA?
Thanks for your question. The answer to your question actually doesn’t have anything to do with any changes in tax law – a Roth IRA account-holder can invest in real estate for rental income at any age. This isn’t a new development. New Roth IRA contributions may be limited after 70 1/2, but a 90-year old landlord can definitely invest in rental property for income. For information on how Roths vary from Traditional IRAs, be sure to check our comparison piece here: https://fitsmallbusiness.com/roth-vs-traditional-401k/
This is in contrast to your other question, which referenced Traditional IRAs. Unfortunately, Traditional IRAs are subject to required minimum distributions starting at 70 1/2 which can make it very difficult to have enough money left in an account to invest in rental property at age 90. For more information on Traditional IRA rules, be sure to check out our article on IRAs here: https://fitsmallbusiness.com/traditional-ira/
If you’re going to invest in real estate for rental income, you’ll need to use a self-directed IRA. Luckily, we’ve written extensively about this topic and have several articles that should answer any questions you have. For information on self-directed IRAs generally, you can check out our ultimate guide here: https://fitsmallbusiness.com/self-directed-ira/
If you’d like to read about how self-directed IRAs can be used specifically for real estate investing, we have an article on that topic here: https://fitsmallbusiness.com/self-directed-ira-for-real-estate-investing/
Lastly, in order to set up a self-directed IRA you’ll need to work with a self-directed IRA facilitator or have your IRA held at a qualified custodian. To read about some of the best companies to help you through this process, be sure to check out our list of the best self-directed IRA providers here: https://fitsmallbusiness.com/self-directed-ira-custodian/
Hope this helps. Best of luck with your investing.