Harness the power of real estate and alternative asset investing in on IRA to make tax-free or tax-deferred profits for the rest of your life!
After completing a successful real estate transaction, do you ever wish a chunk of the profits didn? t have to go back to the IRS for taxes? Do you ever dream about how many more real estate deals you could do or how many more properties you could buy if profits weren? T split with the government because of taxes?
Well dream no more. Realizing tax-free or tax-deferred profits on real estate and alternative asset investing is a reality. Government sponsored retirement plans and IRAs as seeking 401 (k) s allow you to invest in almost anything (including real estate), not just stocks, bonds and mutual funds. And all the benefits those plans provide, tax-deductions and tax-free profits, apply to whatever investment you choose, including real estate.
The Power of Tax-Deferred and Tax-Free Profits? / b> ?The most powerful force on Earth is compounding interest.? ? Albert Einstein
One of an IRA?s greatest features is that It allows Americans to enjoy the true power of tax-deferred compounding interest. Compound interest is earned on interest OCCURS when a principal sum along with any accumulated interest on that sum. In other words, you are not earning interest only on your original investment sum, but also on the interest earned from the original sum.
Compound interest can occur with any investment you make, but the ?true? power compounding of interest is when you make an investment Obtained in a tax-deferred environment, like an IRA.
By taking advantage of an IRA?s tax-deferred status, you do not have to pay tax immediately on your earnings (like the sale of a property or rent collected). Thus, you are able to enjoy the power of compounding on ALL of your profit, not just what is left after taxes.
Now apply those benefits to your real estate or alternative asset investing. Tax-deferred profits on your real estate transactions Allows greater flexibility to make more investments, or to just sit back and watch your real estate investment grow in value, without worrying about taxes.
Is This for Real? Most investors do not know this opportunity exists because most IRA custodians Thurs not offer truly self-directed IRAs that allow Americans to invest in real estate and other non-traditional investments. ? / p> Often, when you ask a custodian / trustee, ?Can I invest in real estate with IRA at?? they will say, I?ve never heard of that ?or,? No, you can not do that. ?What they really mean is that you can not do this at their company because they only offer stocks, mutual funds, bonds , or CD products.
Only a truly self-directed IRA custodian like Equity Trust Company (www.trustetc.com) will allow you to invest in all forms of real estate or any other investments not prohibited by the Internal Revenue Service.
Is This Legal?
It sure is. For more than 33 years and through the management of $ 2 billion in IRA assets, Equity Trust has assisted clients in increasing their financial wealth by investing in a variety of opportunities from real estate and private placements to stocks and bonds in self-directed IRAs and small business retirement plans.
IRS Publication 590 (dealing with IRAs) states what investments are prohibited;. these investments include artwork, stamps, rugs, antiques, and gems All other investments, including stocks, bonds, mutual funds, real estate, mortgages, and private placements, are perfectly acceptable as long as IRS rules governing retirement plans are followed (To view IRS Publication 590, please visit [http://www.trustetc.com/links/irspubs.html]).
Getting Started
? Is it hard to do? is a common question about investing in real estate with a self-directed IRA. It is really simple and is very similar to the way you currently invest in real estate. The following five steps demonstrate how easy it is trate to invest in real estate, or just about anything else, with a self-directed IRA.
1) Establish an account with a self-directed IRA custodian.
First, you must Establish an account with a self-directed IRA custodian and Equity Trust Company is your best option. For more information on why Equity Trust is the right choice for your self-directed IRA needs visit, http://www.trustetc.com.
Setting up of IRA account with Equity Trust usually takes only minutes to complete by filling out a simple application and sending (or faxing) it to our office.
2) fund your account.
Next you have to fund the account, and this is just as easy as opening a self-directed IRA account. There are two ways to fund your account.
? Contributions
You can contribute to your account through a check or wire transfer and contribution limits range from $ 4,000 -. $ 50,000 Depending On Which account you choose
? Transfer / Rollover
In most cases, if you have an existing retirement plan as seeking to IRA, 401k, or 403b these funds can be Transferred to a self-directed IRA Allowing you to make real estate IRA investments.
3) Investment Found:? You re set to go !
Now that you???ve Got your account established, funded and you???ve Identified a real estate investment, you are ready to make an investment.
Making a real estate investment with your IRA is straightforward if you remember a few simple rules. First, complete a Direction of Investment (DOI) DOI instructs the custodian Form. A where and how to remit funds from your IRA for your self-directed real estate purchase. information contained on the DOI includes the property address, cost, funding instructions (check / wire), etc. In addition to the DOI, the custodian will need accompanying investment documents to Ensure proper titling of the investment
4) Ensuring proper title.: You and your IRA are not the same.
One of the most common mistakes (and cause of delays) in real estate IRA investing is when the property is titled incorrectly. Frequently the IRA owner will incorrectly put their personal name on the title of the property.
Remember you and your IRA are two separate entities, and as such, the property needs to be titled in the name of your IRA and not you personally.
? The correct title for a real estate (or other asset) IRA investment is:
Equity Trust Company custodian FBO (for benefit of) YOUR NAME IRA
5) What happens after your IRA owns the property?
Now that your IRA has purchased the property you need to remember two things:
? Expenses: Any expenses associated with the property (maintenance, improvements, property taxes, condo association, general bills, etc.) must come from the IRA
.? Cash flow / profit: All net profits must return to the IRA, meaning all income (rent) and profits (selling of property) are deposited back into your IRA account tax-free
That is all?? there is to it, it ? ? s as simple as 1-2-3. Account in no time at all you can be investing in real estate and other alternative assets receiving tax-free or tax-deferred profits for the rest of your life.
Don? T delay in opening in. Every day that passes is one less day your investment can benefit from the Earth? S most powerful force (at least according to Einstein), compounding interest. id=?article-resource?> self-directed IRA investing, the plans and services available to you, and how to get started, please contact Equity Trust Company via http://www.trustetc.com or by phone at 1-877-693-8209
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Jeffrey Desich is president of Equity Administrative Services and a Registered Principal with Mid Ohio Securities. Additionally, he is Actively involved in Real Estate and the Financial Services Industry. As an expert on real estate investing with self-directed retirement accounts, Jeff has written Numerous articles concerning self-directed IRAs and speaks extensively across the country, educating investors on the topic. With his knowledge and understanding of self-directed IRAs, Jeff has helped thousands of real estate investors create retirement plans for Themselves and their families. Jeff has been quoted in a number of financial publications, including CBS MarketWatch and Investor?s Business Daily, and is a guest lecturer at The Ohio State University ? s prestigious Max Fisher College of Business.
Article Source: http://EzineArticles.com/?expert=Jeff_Desich
Source: http://www.lovefinanceinfo.com/2012/03/tax-free-profits-on-all-of-your-real-estate-deals-yes-you-can/?utm_source=rss&utm_medium=rss&utm_campaign=tax-free-profits-on-all-of-your-real-estate-deals-yes-you-can
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