How To Buy Real Estate TAX FREE Using Your Individual Retirement Account Funds !!!
Real Estate IRA Advantages
Discover How Real Estate IRAs Create Truly Lasting Wealth
If you're a successful real estate investor, or if you're just looking to diversify your retirement portfolio, imagine the possibilities of not paying taxes on the profits of your next investment. It’s possible with the combination of tax-advantages in an IRA and real estate investments. After your next real estate transaction, you could defer paying taxes on the profits for years, or never pay taxes depending on the account, if you use a self-directed IRA.
Real Estate IRA Advantages:
True Investing Diversity: With a self-directed IRA you can diversify beyond the market into real property. You don’t have to be limited to stocks or mutual funds that hold real estate investments – you can own the actual property in your retirement account.
Tax Advantages = Lasting Wealth: Investing over time in a tax-advantage account like a self-directed IRA (tax-deferred/tax-free profits, plus the possibility of large tax deductions) can have a tremendous affect on future wealth (see chart below)..
Secure Hard-Earned Assets: Self-Directed IRAs are afforded protection under federal bankruptcy laws to ensure assets are secure.
Provide Wealth for Your Future Generations: Certain self-directed IRAs allow the passing of assets to beneficiaries after death with little or no tax, allowing you to stretch wealth over generations.
Note about Chart: The example assumes contributions of $4,000 a year, for 30 years, assuming 8% compound interest in a tax-advantage account vs. in an account that is taxed at a 31% rate.
You Can Buy, Rennovate, Sell, And Even Flip Properties. You may use your REAL ESTATE IRA to purchase, rennovate, rehab, and resell as long as all funds to purhcase and repair the property come from the qualified IRA. All profits upon sale of the property and nay rental or other income must be deposited to the IRA.
Real Estate in an IRA Can be Purchased without 100% Funding from Your IRA. You can purchase property in more ways than just an outright purchase of the full amount from your account. These other options include using undivided interest and partnering with others. You can also finance an investment with your IRA, but it must be structured properly. IRA Investments that Use Financing Must Pay UBIT.
Your IRA Cannot Purchase Property Owned by You or a Disqualified Person. One of the most common questions about real estate IRAs is: “Can my IRA purchase a property that I currently own?” The answer is always no. IRS regulations don't allow transactions that are considered "self-dealing," and they don't allow your self-directed IRA to buy property from or sell property to any disqualified person, including yourself.
Expenses Must Be Paid from Your IRA. All expenses related to property owned by your self-directed IRA (maintenance, improvements, property taxes, condo association fees, general bills, etc.) must be paid from your IRA.
Real Estate IRA Income Must Return to Your IRA. All income generated by property owned by your self-directed IRA must be paid into your IRA.
IRA Investments Are Uniquely Titled. You and your IRA are two separate entities. As such the investment needs to be titled in the name of your IRA—not to you personally. All documents related to the investment must be titled correctly to avoid delays. The correct title for most real estate IRA investments is: "Equity Trust Company Custodian [for benefit of] (FBO) [Your Name] IRA".
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