Triple Net Lease in a Roth IRA, can you use SEPP??

L1: Triple Net Lease in a Roth IRA, can you use SEPP??I have not been able to find and answer to this question anywhere and hope someone here can help.
If a person has a Roth IRA and inside are holding a Triple Net Lease (NNN) real estate property that produces monthly rental income between $8-10K for the life of the lease, can a person do a SEPP/72t???
The current property value is $1.3 M with a Net Operating Income of $108,000 per year or $9000 per month.
Thanks.2005-12-04 20:05, By: PsyopRanger, IP: [65.191.137.62]

L2: Triple Net Lease in a Roth IRA, can you use SEPP??Hello Ranger:
The answer to your question is YES; however, I an unconvinced that that is the right question.
I posted on the perils of mixing real estate & SEPPs in an IRA (regular or Roth) on 12/2/05 in response to Irish. Take a look at that posting.
TheBadger
wjstecker@wispertel.net
2005-12-05 06:33, By: TheBadger, IP: [66.250.23.21]

L2: Triple Net Lease in a Roth IRA, can you use SEPP??I don’t think this is the right for discussing ROTH IRAs, irrespective of SEPP 72-T. HOWEVER, briefly, CONTRIBUTIONS can be witdrawn at any time TAX FREE and PENALTY FREE. After 5 years from the start of the year FOR WHICHthe FIRST CONTRIBUTION was made to a ROTH IRA, all earnings distributions are also tax-free and penalty free if made after age 59 1/2, or due to death or disability of thecontributor, or for a “qualified first-time homebuyer”. Manypeoplemade a ROTH IRA CONTRIBUTION when they started in 1998, and there all distributionssince 1/1/2003 are already covered by these rules. Further, once a ROTH IRA was set up, all future contributions revert back to their starting date, an no new 5-year period starts for any additional contributions. The 5-year holding period for the beneficiary of a ROTH IRA includes the time held by the decedent. Withdrawals from ROTH IRAs are considered first to come from regular contributions, and then from earnings after all contributions have been withdrawn. No income tax or 10% penalty applies until total withdrawals exceed total contributions.
ROTH CONVERSIONS FROM TRADITIONAL IRAs have different rules. In order to escape a 10% penalty on distributions from a ROTH CONVERSION, TAXPAYERS WHO DO NOT MEET ONE OF THE PENALTY EXCEPTIONS UNDER SECTION 72(T) HAVE A SEPARATE 5-YEAR HOLDING PERIOD BEGINNING WITH THE TAXABLE YEAR IN WHICH THE CONVERSION WAS MADE. Once that 5-year holding period has passed, taxpayers can withdraw conversion amounts (BUT NOT EARNINGS OR APPRECIATION) without penalty regardless of their age. The tax-free and penalty-free withdrawal of the earnings portions are subject to the same rules as for ROTH IRA CONTRIBUTIONS discussed above.
Therefore, under most situations you could probably make withdrawals from the ROTH IRA without having to worry about setting up a SEPP 72-T, and its related regulations and penalties if “busted” at any time. Review your situation carefully to see if you qualify for tax-free and penalty-free withdrawals already.2005-12-05 13:57, By: dlztaxes, IP: [4.175.9.121]

L2: Triple Net Lease in a Roth IRA, can you use SEPP??Probably true for the average Roth IRA account holder. However, with a high value account balance, any SEPP calculation would produce substantial distributions and almost certainly, this particular Roth is heavily funded by conversions. Under the ordering rules these conversion dollars would likely be reached in the first SEPP year and the oldest ones under the FIFO portion of the ordering rules for conversion distributions may well not have met the 5 year holding requirement and accordingly call for an early withdrawal penalty. That being the case, a SEPP plan would be needed toproduce an exception for the conversion 5 year rule. Busting the SEPP here would result in triggering the retroactive penalty, but thatexposure maybemuted compared torunning afoul of the prohibited transactions/related personsruleswhen holdingrental property in the Roth.2005-12-05 17:11, By: Alan S., IP: [24.116.165.157]