Real Estate and Self-Directing Your IRA
A self-directed individual retirement account is a category in IRA backed by a few financial institutions in America that offer alternative investments for retirement savings.
The self-directing here implies that you, the individual account owner, having complete control over your retirement investments, will have access to your retirement funds to be used to invest in alternative assets, like real estate.
To be able to self-direct your IRA, you must first appoint a trustee to manage the IRA in terms of administrating the formalities required by the IRS.
Advantages of self-directing IRA to buy real estate
– Tax free gains
– Tax free positive cash flow
– Limitless property holding
– Potential to earn greater returns on invested capital
When you purchase real estate with a self-directed IRA, all income and gains gathered by your pre-tax retirement account investment will be routed back to the retirement account 100% tax-free.
How this works is that instead of having to pay tax on the returns of real estate investment, tax is to be paid at a future date, enabling the present investment to grow steady and uninterrupted.
From Land banking to mobile homes, there are a number of quality and reliable options for those interested in self-directed IRA investments.
Disclaimer: The Company introduces general information and education concepts about self-directed retirement accounts (such as 401(k) and IRA accounts). Like any investment, there is risk in using retirement funds for investing in real estate assets. It is possible to lose a portion or all of an investment in real estate – including those purchased with retirement funds. Please review IRS Publication 3125 regarding the use of retirement funds for alternative investments. The document can be found at: http://www.irs.gov/pub/irs-pdf/p3125.pdf. Every individual is different, with unique circumstances. We do not offer tax, accounting, financial or legal advice. Prior to acting upon this information, you may consult your own accounting, legal and financial advisors to evaluate the risks, consequences and suitability of that transaction. The Company is not a retirement account custodian, trustee, or securities dealer.