2nd Mortg Investment In Roth--contribution Limits

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I bought an assignment of a 2nd mortgage as part of a short sale. This was purchased in my Roth IRA.

Loan Balance: $41,000
rate: 11%
arrears: $14,000

my purchase price for assignment: $2500

Tax Question:

Okay so I bought it for $2,500. Does my Roth have the right to get paid off?-- Do I or some other entity have the right to put in another $38,500? If I could, I would not be subject to contribution / income limits.

Any comments would be appreciated.

Comments(3)

  • mcl819015th January, 2004

    as long as you didn't over-fund the IRA when making the initial contribution, you should be ok

    The money made on your $2,500 investment from the Roth will be tax free

  • JohnMerchant15th January, 2004

    Pay back your IRA? WHY? Why not just keep it and let it grow WITHIN the IRA?

    And if you have other pension money, or money in 403b, 401k, etc., that might legally be transferred into your IRA, and that would be without any restriction.

    I've had clients transfer hundreds of thou from other plans into their own SDIRAs so THEY could be their own investment advisors and invest as they chose.

  • microchip15th January, 2004

    __________________________
    Pay back your IRA? WHY? Why not just keep it and let it grow WITHIN the IRA?

    And if you have other pension money, or money in 403b, 401k, etc., that might legally be transferred into your IRA, and that would be without any restriction.

    I've had clients transfer hundreds of thou from other plans into their own SDIRAs so THEY could be their own investment advisors and invest as they chose.
    ___________________________

    I would be letting it grow in the IRA except instead of $2500 growing, I would have $41,000 growing to fund other deals. I'm not sure if I understand what you are saying. Thanks.

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