Nov 20

Check Out Our Roth IRA Calculator

The primary advantage of using a Self-Directed Roth IRA LLC to make investments is that all income and gains associated with the Roth IRA investment grow tax-free and will not be subject to tax upon withdrawal or distribution. This is because unlike traditional IRAs, you are generally not subject to any tax upon taking Roth IRA distributions once you reach the age of 59 1/2. In general, the longer the time period, the more advantageous the Roth IRA is because of the powerful advantages of compounding.

Check Out Our Roth IRA CalculatorOne of the most important determinants impacting how large your retirement can get is the length of time you let your savings grow. The reason for this is that the effects of compounding can become a very powerful tool. Unlike a Traditional IRA, income and gains generated from a Self-Directed Roth IRA grow tax-free. In contrast, income and gains generated by a traditional Self-Directed IRA are only deferred, as taxes must be paid upon distribution, which are vulnerable to future increases in tax rates. The power of tax-free compounding can best be viewed by way of example: Assume Joe, who is thirty years old, decided to start a Self-Directed Roth IRA. Joe had a current Roth IRA balance of zero at that time. Assume Joe decided to make annual Roth IRA contributions of just $3500 each year until he reached the retirement age of 70. Further assume that Joe was able to generate an average annualized rate of return of 9% and the prevailing tax rate was 25%. At age $70 with a Roth IRA, Joe would have $1,289.022 tax-free in his Self-Directed Roth IRA. In contrast, if invested outside of a retirement account, assuming a 25% tax rate, the individual would have just $699,475. Hence, the Self-Directed Roth IRA allowed the individual to accumulate an additional $589,547 of wealth.

Americans love to spend and hate to save. Americans have one of the lowest savings rates for developed countries. Americans are the ultimate consumers and that definitely plays a role. Most people don’t understand the basic concepts of retirement planning and how crucial it is, largely because they’re not widely taught in our high schools or even our colleges and universities. For example, if young workers were shown that if they began funding a self-directed Roth IRA with $3,000 per year at age 20 and continue on through age 65, they will wind up with $2.5 million at retirement (assuming they earn the long-run annual compound growth rate in stocks, which was 9.88 percent from 1926 to 2011). Not a bad result for investing only $3,000 a year.

Calculate Your Self-Directed Roth IRA LLC Plan Contributions Please click here to see for yourself how little it requires to become a millionaire upon retirement by using a Self-Directed Roth IRA:

Saving just $10 a day can make you a millionaire when you retire.

Start saving with a Self-Directed Roth IRA and you will be rolling in money when you retire.  Contact us @ 800.472.0646 for more info!

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Nov 18

Factors to Determine Whether a Real Estate Transaction is Subject to UBTI

In Mauldin v. Comr. 195 F.2d 714 (10th Cir. 1952), the court explained that there is no fixed formula or rule of thumb for determining whether property sold by a taxpayer was held by him primarily for sale to customers in the ordinary course of his trade or business. Each case must rest upon its own facts. The court identified a number of helpful factors to point the way, among which are the purposes for which the property was acquired, whether for sale or investment; and, continuity and frequency of sales as opposed to isolated transactions. However, in Adam v. Comr. 60 T.C. 996 (1973), acq., 1974-1 C.B. 1., the Tax Court analyzed the following factors in determining whether the taxpayer was engaged in the operation of a trade or business:

1. The purpose for which the asset was acquired: Examples of good facts that support the conclusion that the sale of property is excluded from unrelated business taxable income is when the property was originally acquired to further the organization’s tax-exempt purpose – in the case of an IRA – investment.

2. The frequency, continuity, and size of the sales: This factor is particularly significant in determining whether the sale constitutes a trade or business that is regularly carried on, within the meaning of Internal Revenue Code Section 512. It may range from a one-time sale of a parcel of land to many sales over a long period. If sales are infrequent, not continuous, and small, the organization will not likely be viewed as similar to a taxpayer in the trade or business of selling real estate. Conversely, as sales become more frequent, more continuous, and larger, they are more likely to be considered a trade or business that is regularly carried on, comparable to the commercial activity of a taxpayer in the trade or business of selling real estate.

Factors to Determine Whether a Real Estate Transaction is Subject to UBTIHowever, in PLR 9247038, the IRS issued a favorable ruling to an organization that planned to sell land in up to 15 sales spread over a five- to 10-year period. The reason for the number of sales over the time period was that the value of the land was such that it was unlikely a single purchaser would be able to acquire the entire parcel. Also, market conditions dictated this sales process for the organization to receive maximum value, and keep control of the pace and type of development that would occur after the sales. Similarly, in PLR 9017058, where the exempt organization was engaged in selling 45 of 68 lots, such sales were deemed to meet the exception from unrelated business income under Internal Revenue Code Section 512(b)(5). Although this quantity of sales is admittedly significant, external forces essentially dictated the high number of sales. The organization first tried to sell the property in one block but was unsuccessful due to the high cost of developing the property in order to comply with local ordinances. According to the IRS, had these two facts been absent, i.e., (1) the organization had attempted to sell the entire property as a whole, and (2) local ordinances required certain development prior to sale as residential property, it is possible that the high number of sales in this case would have resulted in unrelated business taxable income.

Thus, a limited number of sales is usually a “good fact” for purposes of the facts and circumstances test. However, one should not assume that a set limit applies such as, for example, 15 sales. Rather, one should remember that factors such as that frequency of sales and cost of the property to be sold and market conditions play a part in the number of sales allowed and the time frame of the sales allowed. If an organization has significant amounts of acreage, or the cost of the property precludes finding one purchaser, then it is more likely that the organization will be permitted to sell the property in more than one transaction, and still comply with the requirements of Internal Revenue Code Section 512(b)(5).

3. The activities of the seller in the improvement and disposition of the property: The smaller the extent of improvements by the organization to the property, the more likely the sale will fall under the exclusion for unrelated business income under Internal Revenue Code Section 512(b)(5). In PLR 8043052, an organization proposed to sell a parcel of undeveloped raw land . The fact that the land had remained undeveloped was significant in determining that gains from the proposed transaction would not constitute unrelated business taxable income. In PLR 8522042, the property in question consisted of both developed and undeveloped lands. The developed lands included residential land improved with single-family dwellings or condominium apartments. However, all the improvements were constructed by unrelated third parties. The absence of development activity by the organization demonstrated that it was not holding property for sale to customers in the ordinary course of trade or business.

4. The extent of improvements made to the property; The more minimal the activities of the owner in improving and disposing of property, the more likely its sale will meet the exclusion from unrelated business taxable income under Internal Revenue Code Section 512(b)(5). Of course, the greater the number of improvements allowed, the greater the likelihood of maximizing gain from the sale. So there is a balancing act that organizations must exercise when preparing land for disposition in order to maximize its return, while not acting too much like a dealer and triggering UBIT.

The IRS ruled favorably on improvements made to property in accordance with city or local ordinances requiring the organization to construct a street as well as curb, gutter, sidewalk, drainage, and water supply improvements in order to subdivide the property for sale.

Retaining limited control of the redevelopment project before the land is eventually sold also has been an acceptable activity by a tax-exempt organization when the organization is not involved in any way with advertising, marketing, or otherwise attempting to sell the lots. In PLR 200544021, an organization maintained control over the development process to ensure a compatible environment for the adjoining high school. The IRS recognizes that even though an organization is concerned with receiving a high yield from the sale, it may be equally concerned that the property be developed in keeping with the surrounding features of the property. In addition, an organization’s interest in preserving the natural beauty of a tract of land to be developed is not generally indicative of a normal sales transaction.

In PLR 8950072, a tax-exempt foundation’s largest asset was a parcel of unimproved real estate. The foundation was examining four ways of using the property: (1) continue leasing the property; (2) sell the property as is; (3) complete some preliminary development work — obtaining permits and approvals — and sell the property; or (4) completely develop the property before sale. The last alternative would provide the highest return. The IRS ruled that the first three alternatives would not subject the foundation to UBIT or adversely affect its exempt status. However, the last alternative, to assume all the responsibilities of development, would result in UBTI , but would not affect the foundation’s exempt status. Alternative 4 is very similar to the situation in Brown v. Comr. Like that case, the taxpayer intended to subdivide and develop the property for sale to the general public. Such sales would not be isolated or casual transactions. The organization planned to be extensively involved in both development and marketing activities. Thus, the IRS concluded that the property will be held primarily for sale to customers in the ordinary course of trade or business and not subject to the exclusion from unrelated business income of Internal Revenue Code Section 512(b)(5).

Aside from development activities, the lack of marketing of the property by the organization helps differentiate it from a taxpayer in the trade or business of selling real estate. For example, in PLR 8522042, an organization’s lack of promotional or development activity in connection with the proposed sale demonstrated that it was not holding property for sale to customers in the ordinary course of a trade or business. Moreover, the use of real estate brokers or other independent contractors is not determinative. Rather, the pertinent facts involve the extent of the activities of the organizations themselves in promoting and marketing the property.

5. The proximity of sale to purchase: In evaluating this factor, generally the longer the period between purchase and sale, the more likely the sale will be excluded from UBTI . For example, in PLR 9505020, the fact that a school received land by bequest and held it for a significant period of time was considered a favorable factor, and the IRS did not impose UBIT on the sale of the land when the school was facing condemnation proceedings and it did not actively advertise the sale.

6. The purpose for which the property was held during the taxable year: In evaluating this factor, generally the longer the period between purchase and sale, the more likely the sale will be excluded from UBTI . For example, in PLR 9505020, the fact that a school received land by bequest and held it for a significant period of time was considered a favorable factor, and the IRS did not impose UBIT on the sale of the land when the school was facing condemnation proceedings and it did not actively advertise the sale.
In Adam and subsequent cases, the Tax Court found that no single factor is controlling but all are relevant facts to consider in determining whether the sale of property occurred in the regular course of the taxpayer’s business. In numerous private letter rulings, the IRS cites and applies these same Adam factors. The IRS has characterized these factors as a “facts and circumstances test.” The IRS has even applied these same factors when analyzing the activities of an exempt organization that are carried out through a limited partnership between the exempt organization and the developer.

Please contact one of our Self Directed IRA Experts at 800-472-0646 for more information.

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Nov 17

IRA Financial Group Announces New Online Banking Self-Directed IRA LLC Solution

New online banking self-directed IRA LLC to allow IRA investors to purchase real estate & more from a local bank account.

IRA Financial Group, the leading provider of “checkbook control” self-directed IRA LLC structures, announces the introduction of an online banking self-directed IRA LLC program for retirement investors looking to make traditional as well as alternative investments, such as real estate without tax and from the comfort on an online banking. IRA Financial Group’s new online banking self-directed IRA was designed to offer self-employed retirement investors a diverse and wide array of investment opportunities for their retirement funds all from the comforts of a local bank or brokerage account with online access. With IRA Financial Group’s online banking self-directed IRA LLC solution, one can purchase stocks, mutual funds, precious metals, real estate, and much more all from their online account. With IRA Financial Group’s online banking self-directed IRA LLC structure, the self-directed IRA LLC account can be opened at any local bank and financial institution to make traditional as well as alternative assets, such as real estate all from the online plan account. “Our newly designed online banking ‘checkbook control’ self-directed IRA LLC is perfect for the retirement investor looking to make traditional as well as non-traditional investments, such as real estate with their IRA while gaining more control over their retirement funds and reducing annual IRA account fees,” stated Jacky Ospina, a retirement tax specialist with the IRA Financial Group.

There are many features of the IRA Financial Group’s new online banking self-directed IRA LLC structure that make it so appealing for the alternative asset investor

Leading "Checkbook Control” Self-Directed IRA LLC Provider – IRA Financial Group – Announces New Online Banking Self-Directed IRA LLC Solution IRA Financial Group’s online Self-Directed IRA for real estate investors, also called a real estate IRA with checkbook control, is an IRS approved structure that allows one to use their retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA LLC involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the Roth IRA custodian) and managed by the IRA holder or any third-party. As manager of the IRA LLC, the IRA owner will have control over the IRA assets to make the investments he or she wants and understands

“With IRA Financial Group’s new online self-directed IRA LLC solution, investors can make traditional as well as alternative investments, such as real estate and generate tax-deferred rental income or tax-free rental income in the case of a self-directed Roth IRA,” stated Ms. Ospina.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group, please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Nov 14

CUSTOMIZED SELF DIRECTED IRA LLC “CHECKBOOK CONTROL” STRUCTURES FOR ALL 50 STATES

There are hundreds of thousands of Self Directed IRA accounts in the United States. In the last several years, the number of Self Directed IRA accounts has grown drastically. The Self Directed IRA LLC “Checkbook Control” Structure has been in use for over 15 years.

The Tax Court and the IRS have approved the use of an entity owned by an IRA to make IRA investments tax-free! The use of a limited liability company (“LLC”) owned by an IRA to make IRA investments has been the entity of choice for tens of thousands of Americans. The Self Directed IRA LLC “Checkbook Control” offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian.

CUSTOMIZED SELF DIRECTED IRA LLC "CHECKBOOK CONTROL" STRUCTURES FOR ALL 50 STATESLimited liability companies (“LLCs”) are a creation of state law. An LLC is somewhat of a hybrid entity in that it can be structured to resemble a corporation for owner liability purposes and a partnership for federal income tax purposes. An LLC offers the limited liability the benefit of a corporation and the single level of taxation of a partnership. The owners, not the entity, are then responsible for the payment of the tax, if any.

Today, all fifty states and the District of Columbia have enacted statutes that provide for the creation and governance of LLCs. In addition, all state statutes allow an IRA to be a member/owner of an LLC.

By using an LLC to make IRA Investments, you, as manager of the LLC, will have the ability to use your retirement funds to make almost any type of investment, including real estate, on their own without requiring the consent of any custodian. Have an investment opportunity, such as real estate or precious metals that you would love to make with your IRA funds? Then the Self Directed IRA LLC is your solution. In addition to the tremendous IRA benefits (tax-free gains, tax deductions, asset protection and estate planning), the Self Directed IRA LLC allows you to invest tax-free in investments that you know and understand quickly and without custodian consent.

Learn how using an LLC to make IRA investments can benefit you from a tax, investment, and asset protection standpoint.

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Please contact one of our IRA Experts at 800-472-0646 for more information.

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Nov 13

What is a Self-Directed IRA? You Have Three Options.

Many “traditional IRA” custodians advertise themselves as offering a Self Directed IRA, but what that really means is that you will need their approval any pay transaction fees each time you make an investment. Whereas, in the case of a Self-Directed IRA LLC, also known as a “checkbook control” Self-Directed IRA LLC, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder (you). The Custodian then transfers the IRA Holder’s IRA funds to the LLC’s bank account providing the IRA holder with “checkbook control” over his or her IRA funds from the convenience of a local bank account.

A self-directed IRA is a type of IRA structure that allows the IRA holder (you) to have more control over your retirement funds. Unknown to some, not all self-directed IRAs are the same. It is well known that the IRS allows you to use your IRA to make traditional investments, such as stocks and mutual funds, it is not as well known that the IRS also allows you to use IRA funds to make real estate, precious metals, tax liens, private business and much more tax-free and penalty free! In fact, the IRS only prescribes a few restrictions on the type of investments that can made using IRA funds.

Types of Self-Directed IRA Accounts

There are essentially three types of Self-Directed IRAs:

1. Financial Institution Offered Self-Directed IRA

The most popular Self-Directed IRA account offered is the financial institution Self-Directed IRA. The reason that this type of Self-Directed IRA is so popular is because generally offered by the major financial institutions, such as Bank of America, Wells Fargo, Fidelity, Vanguard, etc. With this type of Self-Directed IRA, the IRA holder is generally able to only make IRA investments offered by the financial institution which typically only includes financial relates investments, such as stock, mutual funds, and ETFs. Even though these types of IRA accounts are called “Self-Directed IRA” accounts that are very limited in their investment scope and do not allow IRA investors to make any non-traditional investments, such as real estate.

Why do the financial institutions limits the investment options available?

A financial institution that offers IRA accounts is not required to offer its IRA investors with the opportunity to make all allowable types of IRA investments. For example, even though real estate is an IRS approved investment, an IRA custodian is not required or obligated to offer that investment option. Accordingly, most financial institutions offering IRA accounts will restrict the IRA investment option to financial products offered by the financial institution. The reason behind this is quite clear – a financial institution earns fees from the sale of financial products not by allowing its clients to pull money out of the IRA account to buy real estate from a third-party.

2. Custodian Controlled Self-Directed IRA

A custodian controlled self-directed IRA offers an IRA investor more investment options than a financial institution self-directed IRA. With a custodian controlled Self-Directed IRA, a special financial institution or IRA administrator will serve as the custodian of the IRA. Generally, all IRA custodians are FDIC insured. Unlike a typical financial institution, most IRA custodians generate fees simply by opening and maintaining IRA accounts and do not offer any financial investment products or platforms. With a custodian controlled Self-Directed IRA, the IRA funds are generally held with the IRA custodian and the IRA custodian, at the IRA holder’s direction, will then invest those IRA funds accordingly.

Until a 1996 court case, the custodian controlled Self-Directed IRA was the only way one was able to use IRA funds to make a non-traditional investment, such as real estate. In essence with a custodian controlled Self-Directed IRA, every step an IRA holder wanted to make had to be carried out through a custodian, which would involve high annual fees, transaction fees, and time delays. In other words, the IRA holder could not take direct control. Every time the IRA holder wanted to pay an IRA transaction expense, for example mowing the grass or pay the bills on a real estate IRA investment, the IRA holder had to pay a custodian to do it.

Experience the Self-Directed IRA LLC “Checkbook Control” Advantage3. “Checkbook Control” Self-Directed IRA LLC

In the 1996 case of Swanson vs. Commissioner, 106 T.C. 76 (1996), the tax court gave its blessing to a new type of self-directed IRA structure — the Self-Directed IRA LLC also known as the checkbook IRA— that is much simpler than investing through a regular custodial controlled self-directed IRA account

With a “checkbook control” Self Directed IRA, the IRA holder (you) will have total control over your IRA funds and you will no longer have to get each investment approved by the custodian of your account like in a custodian controlled Self-Directed IRA. Instead, all decisions are truly yours. When you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment.

Under the checkbook IRA format, the IRA is set up as a self-directed account that’s capitalized by funds rolled over from your current retirement account. Then, a limited liability company (“LLC”) is created in which your new IRA purchases all the membership units/interests. Now, your money is held in an LLC and you are ready to invest at your discretion. A “checkbook control” Self Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

With a Self Directed IRA, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self Directed IRA LLC bank account to make the investment. The Self Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Advantages of Using a “Checkbook Control” Self-Directed IRA LLC vs. a Custodian Controlled Self-Directed IRA

“Checkbook Control”: With a Self-Directed IRA LLC, you have even more advantages than using a custodian controlled IRA, including what’s called “Checkbook Control.” As manager of the Self-Directed IRA LLC you will have the ability to make IRA investments without seeking the consent of a custodian. Instead, all decisions are truly yours.

Access: With a Self-Directed IRA LLC, you will have direct access to your IRA funds allowing you to make an investment quickly and efficiently. There is no need to obtain approvals from your custodian or deal with time delays in awaiting approval from your custodian or pay any review fees. Your IRA funds will be held at a local bank instead of at a custodian you have never worked with before.

Speed: With a Self-Directed IRA LLC, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA LLC allows you to eliminate the delays associated with a custodian controlled Self-Directed IRA account, enabling you to act quickly when the right investment opportunity presents itself.

Lower fees: Another advantage to a Self-Directed IRA LLC account is that you will save a lot of money on custodian fees associated with a custodian controlled IRA. With the “checkbook control” Self-Directed IRA LLC structure, you will not be required to seek custodian investments when making IRA investments allowing you to eliminate custodian transaction fees and account valuation fees associated with a custodian controlled Self-Directed IRA.

Limited liability protection: By using a Self-Directed IRA LLC with “Checkbook Control”, your IRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your IRA assets held outside the LLC will be shielded from attack. This is especially important in the case of IRA real estate investments where many state statutes impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.

Asset & Creditor Protection: By using a Self-Directed IRA LLC with “checkbook control” the IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self-Directed IRA from creditors’ attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed IRA LLC, the IRA will be generally protected against creditor attack against the IRA holder.

Privacy Protection: With a Self-Directed IRA LLC, the investment will be made in the name of the LLC, whereas, with a custodian controlled Self-Directed IRA the name of the IRA owner will be in the name of the investment allowing the public to easily locate the asset’s owner. For example, if an IRA LLC is established a state such as Nevada or Delaware which offers strong privacy protection, identifying the owner of the LLC would be extremely difficult.

To learn more about the advantages of using a “checkbook control” Self-Directed IRA LLC, please contact a retirement tax specialist at 800-472-0646.

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Nov 12

Transferring a Roth IRA to a Self-Directed Roth IRA LLC

Individuals may generally transfer Roth IRA or rollover eligible qualified retirement plan assets into a self-directed Roth IRA LLC structure. Individuals may not rollover Roth IRA funds into a qualified retirement plan, such as a Solo 401(k) Plan or a pre-tax IRA account, such as a Traditional IRA or SEP IRA.

What is the most Common Way to Fund a Self-Directed Roth IRA?

Transfers and rollovers are types of transactions that allow movements of assets between like IRAs – Roth IRA to Roth IRA. Note – only after-tax funds can be rolled into a Roth IRA. No pre-tax retirement funds are eligible to be rolled into a Roth IRA.

How to Transfer a Roth IRA to a Self-Directed Roth IRA LLCRoth IRA Transfers to a Self-Directed Roth IRA

A Roth IRA-to Roth IRA transfer is one of the most common methods of moving assets from one Roth IRA to another. A transfer usually occurs between two separate financial organizations, but a transfer may also occur between Roth IRAs held at the same organization. If a Roth IRA transfer is handled correctly the transfer is neither taxable nor reportable to the IRS. With a Roth IRA transfer, the Roth IRA holder directs the transfer, but does not actually receive the Roth IRA assets. Instead, the transaction in completed by the distributing and receiving financial institutions. In sum, in order for the Roth IRA transfer to be tax-free and penalty-free, the Roth IRA holder must not receive the Roth IRA funds in a transfer. Rather, the check must be made payable to the new Roth IRA custodian. Also, there is no reporting or withholding to the IRS on a Roth IRA transfer.

The retirement tax professionals at the IRA Financial Group will assist you fund your Self-Directed Roth IRA LLC by transferring your current Roth IRA funds to your new Self-Directed Roth IRA structure tax-free and penalty-free.

How the Roth IRA to Self-Directed Roth IRA Transfer Works?

Your assigned retirement tax professional will work with you to establish a new Self-Directed Roth IRA account at a new FDIC and IRS approved Roth IRA custodian. The new custodian will then, with your consent, request the transfer of your Roth IRA assets from your existing Roth IRA custodian in a tax-free and penalty-free Roth IRA transfer. Once the Roth IRA funds are either transferred by wire or check tax-free to the new Roth IRA custodian, the new custodian will be able to invest the Roth IRA assets into the new Roth IRA LLC “checkbook control” structure. Once the funds have been transferred to the new Roth IRA LLC, you, as manager of the Roth IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

60-Day Rollover Rule

An individual generally has sixty (60) days from receipt of the eligible rollover distribution from a Roth IRA account to roll the funds into a Self-Directed Roth IRA LLC structure. The 60-day period starts the day after the individual receives the distribution. Usually, no exceptions apply to the 60-day time period. However, in cases where the 60-day period expires on a Saturday, Sunday, or legal holiday, the individual may execute the rollover on the following business day.

An individual receiving an eligible rollover distribution may rollover the entire amount received or any portion of the amount received. The amount of the eligible rollover distribution that is not rolled over to a Roth IRA is generally included in the individual’s gross income and could be subject to a 10% early distribution penalty if the individual is under the age of 591/2.

How the 60-Day Rollover Works with a Self-Directed Roth IRA

The retirement tax professionals at the IRA Financial Group will assist you in rolling over your 60-day eligible rollover distribution to a new FDIC and IRS approved IRA custodian. Once the 60-day eligible rollover distribution has been deposited with the new Roth IRA custodian within the 60-day period, the new custodian will be able to invest the Roth IRA assets into the new Roth IRA LLC “checkbook control” structure. Once the Roth IRA funds have been transferred to the new Roth IRA LLC, you, as manager of the Roth IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

Self-Directed Roth IRA Transfer Experts

The retirement tax professionals at the IRA Financial Group will assist you in transferring your Roth IRA tax-free and penalty-free to a “checkbook control” self-directed Roth IRA LLC solution. Each client of the IRA Financial Group will work directly with an assigned retirement tax professional to establish the Self-Directed Roth IRA LLC solution and make sure that the self-directed IRA transaction is structured in the most tax efficient manner and is not in violation of any IRS rules.

To learn more about the Self-Directed Roth IRA transfer or direct or indirect rollover rules, please contact a tax professional at 800-472-0646.

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Nov 11

Some FAQs about IRA Rollovers

What is a Rollover IRA?

To permit tax-free transfers of retirement savings from one type of investment to another, as well as to increase the portability of qualified plan rights for employees moving from one job to another, Congress included a complicated web of rollover provisions in ERISA. These provisions cover transfers from one IRA to another, transfers from qualified pension, profit-sharing, stock bonus, and annuity plans to IRAs, and transfers from IRAs to qualified plans. An IRA may also, under limited circumstances, make a rollover distribution to a health savings account (HSA). In other words, if you receive a distribution from a qualified plan, you might decide to put some or all of the distribution amount into an IRA. The IRA that receives the qualified plan distribution is called a rollover IRA.

Can I rollover funds from a Traditional IRA to another Traditional IRA?

A distribution from an IRA to the individual for whose benefit the account or annuity is maintained is not taxable to the recipient if reinvested within 60 days in another IRA (other than an endowment contract) for the benefit of the same individual. The rule operates on an all-or-nothing basis. The entire amount received from the old IRA must be transferred to the transferee IRA. If anything is held back, the rollover rule does not apply, and everything received from the old IRA, including any amount transferred to another IRA, is treated as a taxable distribution. However, the distribution from the old IRA need not include the taxpayer’s entire interest. An IRA can be split, for example, by rolling a portion of it into a new IRA.

If property other than money is received from the old IRA, that property, not substitute property of equal value or the cash proceeds of the property’s sale, must be included in the transfer to the new IRA. According to the Tax Court, the rollover contribution must be of cash if the distribution is in cash.

The privilege of rolling over from IRA to IRA may be exercised only once in a 12-month period.

Some FAQs about IRA RolloversCan I rollover funds from a qualified plan (401(k) Plan) to a Traditional IRA?

Very generally, a qualified plan or annuity participant can roll over any distribution other than a distribution that is part of a series of payments over the distributee’s life or life expectancy or over a fixed period of at least 10 years, a distribution required by the minimum distribution rules of Internal Revenue Code Section 401(a)(9) , or a hardship distribution. An employee’s surviving spouse may also roll over a similar distribution received on account of the employee’s death.

Can I rollover a Traditional IRA I inherited?

A taxpayer whose interest in an IRA is as beneficiary of the person who created the IRA is generally denied the privilege of rolling over tax free from the IRA to another type IRA or a qualified plan or tax-deferred annuity, except that a surviving spouse may roll over to another IRA but not a qualified plan. Because the tax allowances for IRAs (including an IRA’s tax exemption) are intended to encourage saving for the retirement of the contributor and surviving spouse, Congress decided it was inappropriate to allow the tax exemption to be prolonged by rollovers after the contributor has died and the account has passed into the hands of a person other than a surviving spouse.

These are just a few questions that arise when rolling your retirement plan into an IRA.  If you have other questions or want more information, please contact an IRA Expert @ 800.472.0646.

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Nov 07

Be Careful if You Inherit an IRA

Have you inherited an IRA recently or expect to in the future?  You need to understand the rules of inheriting one and how they effect you.  It’s a tough time when you lose someone close to you, but that person wanted to leave you in a better place financially.  If you don’t know the options you have, you may cost yourself a lot of money and lose out on the benefits your loved one left for you.

First and foremost, you need to re-title the IRA you inherited.  This should be a simple legal move, but if you don’t make your intentions clear, you may lose out on big savings.  Those intentions may be misunderstood leading to a distribution of the entire IRA.  If that happens, the funds from the IRA are treated as gross income and you are taxed on the entire amount.  Not only do you lose the tax-deferred treatment of the account, there is no way to undo the distribution once it occurs.  To avoid this, be clear to the custodian that you have an inherited IRA and only one to properly title it.  The new IRA should have both the original owner’s name as well as the beneficiary and is being held for the benefit of the beneficiary.  The custodian will need to verify the passing of the original owner and make sure that you are the stated beneficiary.  All the usual paperwork will then have to be filled out.

Be Careful if You Inherit an IRAAnother thing you may want to do is move the inherited IRA to your own custodian (if it’s different).  Again, the title of the inherited IRA must be changed to your name.  Only then can you request a transfer to your financial institution.  When you do this, you want to request a trustee to trustee transfer.  The funds cannot be in your possession or they will be treated as a distribution.  This differs from a regular rollover where you have 60 days to move the money into a new account and not have it treated as a distribution.  The best way to do perform this transfer is to title the new IRA with your custodian the exact same way as the inherited IRA you wish to move.

If you are the the surviving spouse and beneficiary of the IRA, you have it a little simpler.  You have the options of rolling over the inherited IRA into your own IRA, whether it’s an existing one or a new one.  Only the spouse of the original owner can do this.

Lastly, Required Minimum Distribution (RMD) rules apply to the inherited IRA.  You must start taking RMDs the year following the year of the original owner’s death.  Failure to take RMDs will lead to a 50% penalty on top of the taxes due on the amount.  The schedule you need to follow is based on the previous owner’s age at the time of his or her passing.  These rules can be found in IRS Publication 590.

In closing, if you are a beneficiary or have an IRA that you would like to leave to someone, make sure you (and your beneficiaries) know the rules regarding an inherited IRA.  If you do not, you or your heirs will be missing out on years of tax-deferred savings.  If you have any questions, please contact a retirement expert at the IRA Financial Group @ 800.472.0646!

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Nov 06

Self-Directed IRA Investors Helping Rebounding Real Estate Market By Making-Up For Surprising Drop in First Time Home Buyers in 2014

As first-time home-buyers are abandoning the real estate market, self-directed IRA clients are picking up the slack

IRA Financial Group, the leading provider of “checkbook control” self-directed IRA LLC solutions, has seen a surge in self-directed IRA investors looking to the real estate market for investment opportunities. Accordingly, the influx of self-directed IRA real estate investors into the market has helped bolster the U.S. real estate market in light of a lack of first time home buyers. The percentage of homes that were sold to first-time home-buyers dropped to 33% in 2014, the lowest percentage in almost three decades, according to the National Association of Realtors. Typically, first-time home-buyers comprise about 40% of all purchases. “With mortgage rates at very low rates it is somewhat surprising that first-time home buyers are not looking to jump into the real estate market, “ stated Adam Bergman, a tax partner with the IRA Financial Group. The lack of first time home-buyers in the real estate market has opened the door for Self-Directed IRA and Solo 401(k) plan investors to take advantage of some attractive investment opportunities. “It is fair to blame the lack of first time home buyers in the real estate market on increasing student debt loads and salaries that aren’t keeping up with rising home prices,” stated Mr. Bergman.

The primary advantage of using a Self Directed IRA LLC to make investments, such as real estate, is that investments can be made by simply writing a check. In addition, all income and gains associated with the IRA investment grow tax-deferred and return to the IRA LLC.

With IRA Financial Group’s self directed IRA LLC solution, traditional IRA or Roth IRA funds can be used to buy real estate throughout the United States and globally in a tax-deferred account by simply writing a check and without the need of custodian consent or high custodian fees. “The lack of first-time home buyers in the market has presented many attractive real estate investment opportunities for our Self-Directed IRA clients, “ stated Mr. Bergman.

IRA Financial Group’s Self-Directed IRA LLC for real estate investors, also called a real estate IRA with checkbook control or a Self-Directed real estate IRA, is an IRS approved structure that allows one to use Self-Directed IRA Investors Helping Rebounding Real Estate Market By Making-Up For Surprising Drop in First Time Home Buyers in 2014their retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA LLC involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the Roth IRA custodian) and managed by the IRA holder or any third-party. As a result, the Self-Directed IRA LLC provides the retirement account holder with greater control over his or her retirement assets allowing the individual to make traditional as well as non-traditional investments, such as real estate tax-deferred and with much lower annual fees.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Nov 04

What You Need to Know About the Self-Directed IRA LLC

THE SELF-DIRECTED IRA LLC SOLUTION

Get full control of your retirement funds and unlock a world of investment opportunities with IRA Financial Group’s self-directed IRA LLC with checkbook control.

Protect and Better Diversify your Retirement Funds from a Wall Street Meltdown or Inflation risk with a Self-Directed IRA LLC.

Are you missing out on valuable investment opportunities, such as real estate because your retirement funds aren’t easily accessible?

Making an investment is as easy as writing a check. No more transaction fees or delays!

Low annual custodian fees

Make IRA investments without custodian delay

Why Should I Establish a Self-Directed IRA?

A self-directed IRA LLC will offer you the ability to make traditional (stocks, mutual funds) as well as non-traditional investments (real estate, precious metals, etc.) tax-free and without custodian consent. Tired of seeing all your hard earned retirement assets lose value in the stock market? Upset that the value of your IRA or 401(k) has taken a dive over the last four years? Protect and better diversify your retirement portfolio with a self-directed IRA LLC. Take control of your retirement future and have the opportunity to make the investments you want when you want them.

With IRA Financial Group’s Self-Directed IRA LLC, a special purpose limited liability company (“LLC”) is created which is owned 100% by the IRA and managed by you or any third-person. The advantage of using an LLC to make the investment is that an LLC is treated as a passthrough entity for tax purposes meaning the owner of the LLC would be subject to the tax not the LLC itself. However, as per Internal revenue Code Section 408, IRAs are exempt from tax. As a result, in most cases, all income and gains generated by the IRA LLC would flow back to the IRA tax-free. In addition, the LLC investment vehicle allows the IRA owner to take more control of his or her retirement funds by keeping the IRA funds at a LLC bank account and not with a far away custodian offering “checkbook control” and greater flexibility to make investments quick and without delay.

With IRA Financial Group self-directed IRA LLC, work with our in-house retirement tax professionals and gain the ability to protect your retirement future from a turbulent stock market or future inflation by having the opportunity to re-allocate your retirement portfolio into different asset classes, such as real estate, precious metals, private business, peer-to-peer lending, foreign currency or options. Don’t let Wall Street blow your retirement – diversify your retirement portfolio with a self-directed IRA LLC.

How Does IRA Financial Group’s Self-Directed IRA Differ from a Custodian Controlled IRA?

With IRA Financial Group “checkbook control” self-directed IRA LLC, making an investment is as simple as writing a check. No longer will you have to pay high IRA custodian fees or have to endure long delays and risk losing your deal as a result of having to have every IRA transaction pre-approved by the custodian. IRA Financial Group’s Self-Directed IRA LLC, is an IRS approved structure that allows you to use your retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the IRA custodian) and managed by you or any third-party. As manager of the IRA LLC, you will have control over the IRA assets and be able to make investments directly from your LLC bank account, which can be opened at any local bank. See an investment you want to make – simply write a check or wire the funds straight from your IRA LLC bank account. Don’t waste time and money relying on a custodian to make your IRA investments. The IRS gives you the ability to have more control and authority over your IRA assets – don’t let a custodian control your retirement future – get an IRS approved “checkbook control” self-directed IRA LLC. Work with our in-house retirement tax professionals to establish your IRS compliant self-directed IRA LLC.

A Self-Directed IRA LLC “Checkbook Control” structure offers one the ability to use his or her retirement funds to make almost any type of investment including real estate on their own without requiring the consent of any custodian tax-free!

Take Control of Your Retirement Funds Tax-Free!

The Self-Directed IRA structure has become a popular choice for gaining total investment control (“Checkbook Control”) over your IRA funds and making investments tax-free.

IRA Financial Group’s Self-Directed IRA LLC with “checkbook control” solution is tax court and IRS approved. A special purpose Self Directed IRA LLClimited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder – which is YOU. The IRA Custodian then transfers the IRA Holder’s retirement funds to the new IRA LLC’s bank account, which can be opened at any local bank providing the IRA holder with “checkbook control” over his or her IRA funds. When you find an investment that you want to make with your IRA funds, as manager of the LLC, you will simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. All investment income and gains would flow back to your Self-Directed IRA Tax-Free! The Self Directed IRA LLC with “checkbook control” allows you to eliminate the delays and costs associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

A World of Investment Opportunities

Tired of being forced to invest in stocks or mutual funds? Have an investment opportunity, such as real estate or a business investment that you would love to make with your IRA funds? Then the Self-Directed IRA LLC is your solution.

With a Self-Directed IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover, including: domestic or foreign real estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals (i.e. gold or silver), hard money & peer to peer lending as well as stock and mutual funds; your only limit is your imagination. The income and gains from these investments will flow back into your IRA tax-free.

Purchasing Real Estate Tax Free with a Self Directed IRA Real Estate LLC

The IRS has always permitted an IRA to purchase or hold domestic or foreign real estate or raw land. Making a real estate investment is as simple as writing a check with a Self Directed IRA – also known as a Self Directed IRA Real Estate LLC. The Self Directed IRA Real Estate LLC structure, which works the same way as the Self Directed IRA LLC structure, is used for tax-free investing IRA funds in real estate.

Purchasing Real Estate Tax Free with a Self Directed IRA Real Estate LLC

Since you are the manager of your Self-Directed IRA Real Estate LLC, you have the authority to make investment decisions on behalf of your IRA. One major advantage of purchasing real estate with a Self-Directed IRA is that all gains are tax-deferred until a distribution is taken (Traditional IRA distributions are not required until the IRA owner turns 70 1/2). In the case of a Self-Directed Roth IRA LLC, all gains are tax-free.

Stress-Free Investing

With a Self-Directed IRA structure, you will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your IRA funds, as manager of the LLC, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Save on Custodian Fees

A Self-Directed IRA LLC structure will help you save a significant amount of money on custodian fees. With a Self-Directed IRA LLC you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, your IRA funds will be transferred tax-free via a passive custodian to a new LLC bank account where you as manager of the LLC can make investments, such as real estate tax-free and without custodian consent. The IRA custodian is not involved in any way with the IRA investment. In fact, the IRA custodian is not even aware of the type of investments that are being made since you, as manager of the LLC, are in total control of your IRA funds.

Shelter Income Tax-Free with a Self-Directed Roth IRA LLC

The Self-Directed Roth IRA LLC structure, which works the same way as the Self-Directed IRA LLC structure, is used for investing Roth IRA funds in real estate and other investments tax-free! Using a Self-Directed Roth IRA LLC to make investments will allow all the income and gains associated with the Roth IRA investment to grow tax-free and not be subject to tax upon withdrawal or distribution. The Self-Directed Roth IRA LLC presents a number of exciting tax planning opportunities.

The primary advantage of using a Self-Directed Roth IRA LLC to make investments is that all income and gains associated with the Roth IRA investment grow tax-free and will not be subject to tax upon withdrawal or distribution.

Asset & Creditor Protection

By using a Self-Directed IRA LLC with “Checkbook Control”, the IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self-Directed IRA from creditors’ attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed IRA LLC, the IRA will be generally protected against creditor attack against the IRA holder.

Limited Liability Protection

By using a Self-Directed IRA LLC, your IRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your IRA assets held outside the LLC will be shielded from attack.

Don’t trust an investment advisor or real estate professional to establish your IRS compliant self-directed IRA structure!

Work directly with our in-house retirement tax professionals to setup an IRS compliant Self-Directed IRA LLC with “checkbook control”. IRA Financial Group was founded by retirement tax professionals that worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP. Each client has direct access to our in-house retirement tax professionals to ensure that the Self-Directed IRA LLC structure is customized to satisfy the client’s retirement and investment objectives.

Why Work With the IRA Financial Group?

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP. Over the years, we have helped thousands of clients establish IRS compliant Self-Directed IRA LLC solutions. With our work experience at some of the largest law firms in the country, our retirement tax professionals’ tax and IRA knowledge in this area is unmatched.

To learn more about using a “Checkbook Control” Self-Directed IRA LLC to make real estate and other investments without tax, please contact one of our Self-Directed IRA Experts at 800-472-0646 for more information.

IRA Financial Group – Founded by Retirement Tax Professionals who know the Law!

Call us at 800-472-0646 and learn more about the benefits and tax advantages of establishing a Self-Directed IRA LLC with “Checkbook Control”. Take control of your retirement funds now! It’s quick & easy and we can have your Self-Directed IRA LLC structure established in days!

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