Dec 01

Things to Know About the Self-Directed IRA

This article recently appeared at usnews.com by contributor Rebecca Lake:

Investing in an individual retirement account is an effective way to supplement savings in a 401(k) or another employer-sponsored plan. According to a 2015 TIAA-CREF IRA survey, 18 percent of Americans save in an IRA and 56 percent of those who don’t have one said they would consider including an IRA in their retirement plans.

While traditional and Roth IRAs are relatively well-known, there’s a third option that retirement savers should be aware of: the self-directed IRA.

Self-directed IRAs, in a nutshell, put you in control of your investment choices. In addition to stocks, mutual funds and bonds, you can invest in real estate, precious metals, energy and other alternative investments.

“The primary advantage of saving for retirement in a self-directed IRA is that you’re able to invest in the kinds of investments you have specific knowledge of or expertise in,” says Mark Goldstein, president of SAFE-Money Alliance in Las Cruces, New Mexico.

That freedom, paired with the potential for tax-deductible contributions and tax-deferred earnings makes self-directed IRAs an appealing choice for investors whose focus lies on creating lasting wealth. That doesn’t mean, however, that a self-directed IRA is right for everyone.

Before adding one of these accounts to your portfolio, it’s important to understand what makes a self-directed IRA different and how it can impact your retirement outlook.

Your investing style matters. Every investor has a distinct personality when it comes to how they manage their investments and that can’t be ignored when the question of a self-directed IRA is on the table.

Kirk Chisholm, a wealth manager and principal at Innovative Advisory Group in Lexington, Massachusetts, says self-directed IRAs are best suited to investors who are meticulous about managing their accounts and prefer a do-it-yourself approach.

“Investing in traditional assets can be as easy as pushing a button on your computer, while alternative assets can be much more paperwork intensive,” Chisholm says.

Beyond that, investors must be aware of the specific rules that go along with investing in a self-directed IRA. For example, you can’t use a self-directed IRA to invest in things like collectibles, antiques or rare coins.

David Hryck, a tax attorney and partner at New York-based Reed Smith, recommends that investors educate themselves on how self-directed IRAs operate before diving in.

“A self-directed IRA gives you far more responsibility and forces you to really understand how to invest properly,” Hryck says.

Your investment goals and risk tolerance also come into play. Even if you have no trepidation about guiding your own investment choices, a self-directed IRA may still miss the mark if it doesn’t align with what you hope to accomplish or requires you to assume more risk than you’d like.

“Self-directed IRAs are ideal for people looking for portfolio diversification in areas they’re familiar with, outside of the typical choices,” Goldstein says.

He points out that experienced investors may feel that the risk involved in investing in assets they understand may be considerably less than the risk of investing exclusively in a conventional IRA. The opposite may be true for someone with a shorter history of investing.

Your choice of investments can also influence your perspective on including a self-directed IRA in your portfolio.

For example, let’s say you’re interested in generating steady cash flow through a rental property. If you were to purchase a property directly, any rental income received each month would go right back into your pocket. When you invest in a rental home using a self-directed IRA, on the other hand, the rental income must be funneled back into the IRA.

If your long-term goal is increasing your nest egg in a tax-advantaged way, then the self-directed IRA might make more sense. On the other hand, if you need an additional income stream right now, you’d likely be better off investing in real estate outside of your retirement accounts.

Look at the bigger tax picture. Self-directed IRAs can offer some tax benefits but there are some potential pitfalls investors need to be aware of.

“The primary advantage (of a self-directed IRA) is deferred taxation on growth,” says Colby Winslow, a certified financial planner with WaterOak Advisors in Orlando, Florida.

Another advantage of using a self-directed IRA is the ability to hold investments that would typically be held as taxable assets. When taxes can be deferred, the tax that would have been paid can be reinvested to earn growth on those savings.

At the same time, investors need to be aware of how investing in a traditional self-directed IRA can affect their tax situation.

“The money coming out of the self-directed IRA will be taxable upon withdrawal,” says Jimmy Lee, CEO of Las Vegas-based Wealth Consulting Group.

For an investor who ends up in a higher tax bracket at retirement, distributions from a traditional IRA can lead to a higher tax bill. Another host of issues can crop up once you reach age 70.5.

“If someone purchases fairly illiquid assets and they’re expected to take required minimum distributions, they may be forced to sell assets within the IRA to free up enough cash to transfer out,” Winslow says.

Failing to take required minimum distributions can trigger a substantial tax penalty, equal to 50 percent of the amount you’re required to withdraw. That could add significantly to your tax burden so you need to have a plan for managing illiquid assets before RMDs kick in.

Choose your custodian carefully. The custodian holds the assets in your self-directed IRA for you and it’s important to carefully vet your options. If you need a starting point, Lee encourages investors to consider the size of the custodian, since that can be an indication of the firm’s stability.

Jaime Raskulinecz, founder and CEO of Next Generation Trust Services in Roseland, New Jersey, says it’s also important to look at the services a prospective custodian provides.

While a custodian for a self-directed IRA won’t offer direct investment advice, Raskulinecz says they should be able to answer questions about your plan, efficiently manage the paperwork and reporting and regularly review your account to ensure that you’re not engaging in prohibited transactions that fall outside of IRS guidelines.

Chisholm reminds investors to consider whether a self-directed IRA custodian accepts the type of assets you’re considering investing in. Lastly, he cautions against choosing a custodian without thoroughly reviewing the fees.

“Each company’s fee schedule caters to a certain type of investor,” Chisholm says, and ultimately, you should be looking for one that best fits your investment strategy.

For more information about the Self-Directed IRA, please contact the IRA Financial Group @ 800.472.0646.

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Nov 28

What is Considered a Disqualified Transaction with an IRA?

Under Internal Revenue Code Section 408, the acquisition by an IRA or an individually-directed account under a qualified retirement plan of any collectible is treated as a distribution from the IRA or account in an amount equal to the cost to the IRA or account of the collectible (Code Sec. 408(m)(1)). A collectible is any work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or any other tangible personal property specified by IRS for this purpose (Code Sec. 408(m)(2)).

What is Considered a Disqualified Transaction with an IRA?

In general, under Code Section 408, an IRA cannot invest in life insurance contracts or collectibles defined below:

  • Any work of art
  • Any metal or gem
  • Any alcoholic beverage
  • Any rug or antique
  • Any stamp
  • Most coins
  • Baseball cards

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

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Nov 21

Rules for the Real Estate IRA Structure

A Self-Directed IRA LLC 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 or person. The IRS and Department of Labor only describe the types of investments that are prohibited, which are very few.

The basis of the prohibited transaction rules are based on the premise that investments involving IRA and related parties are handled in a way that benefits the retirement account and not the IRA owner. The rules prohibit transactions between the IRA and certain individuals known as “disqualified persons”. These rules can be found in Internal Revenue Code Section 4975. In general, the definition of a “disqualified person” (Internal Revenue Code Section 4975(e)(2)) extends into a variety of related party scenarios, but generally includes the IRA holder, any ancestors or lineal descendants of the IRA holder, and entities in which the IRA holder holds a controlling equity or management interest.

Rules for the Real Estate IRA StructureThe IRS permits using a Self-Directed IRA LLC to purchase real estate or raw land. Since you are the manager of the Self-Directed IRA LLC, making a real estate investment is as simple as writing a check from your Self-Directed IRA bank account. The advantage of purchasing real estate with your Self-Directed IRA LLC is that all gains are tax-deferred until a distribution is taken. In the case of a Roth Self-Directed IRA, all gains are tax-free.

For example, if you purchased a piece of property with your Self-Directed IRA LLC for $100,000 and you later sold the property for $300,000, the $200,000 of gain appreciation would generally be tax-deferred. Whereas, if you purchased the property using personal funds (non-retirement funds), the gain would be subject to federal income tax and in most cases state income tax.

When it comes to using a self-directed IRA to purchase real estate, there are a number of rules that should be followed in order to make sure the real estate IRA investment does not violate any of the IRS prohibited transaction rules.

  • The deposit and purchase price for the real estate property should be paid using Self-Directed IRA LLC funds or funds from a non-disqualified third-party
  • No personal funds or funds from a “disqualified person” should be used
  • All expenses, repairs, taxes incurred in connection with the Self-Directed IRA real estate investment should be paid using retirement funds – no personal funds should be used
  • If additional funds are required for improvements or other matters involving the real estate investments, all funds should come from the Self-Directed IRA or from a non “disqualified person”
  • If financing is needed for a real estate transaction, only nonrecourse financing should be used. A nonrecourse loan is a loan that is not personally guaranteed and whereby the lender’s only recourse is against the property and not against the borrower.
  • The IRA holder or “disqualified person” in connection with the real estate investment should perform no services in connection with the use of self-directed IRA LLC. In general, other than standard management type of services (necessary and required tasks in connection with the maintenance of the LLC), no active services should be performed by the LLC manager or a “disqualified person” with respect to the real estate transaction.
  • Title of the real estate purchased should be in the name of the Self-Directed IRA LLC. For example, if Joe Smith established a Self-Directed IRA LLC and named the LLC XYZ, LLC, title to real estate purchased by Joe’s Self-Directed IRA LLC would be as follows: XYZ LLC
  • Although the use of a nonrecourse loan is permitted with a self-directed IRA when buying real estate, the use of a nonrecourse loan would impose a tax pursuant to IRC 514 on a percentage of the income generated by the IRA investment based off a percentage of the debt used in proportion to the amount of cash invested.
  • Keep good records of income and expenses generated by the real estate investment
  • All income, gains or losses from the Self-Directed IRA LLC real estate investment should be allocated to the IRA and be returned to the IRA LLC bank account
  • Make sure you perform adequate diligence on the property you will be purchasing especially if it is in a state you do not live in
  • Make sure you will not be engaging in any self-dealing real estate transaction which would involve buying or selling real estate that will personally benefit you or a “disqualified person”
  • If you need to make additional IRA contributions to your self-directed IRA, the contribution should be made to the IRA custodian/administrator and then the funds will be transferred to the IRA LLC.

Using a self-directed IRA LLC to buy real estate is quick and easy, however, there are a number of IRS rules and potential tax issues that must be addressed before making the self-directed IRA real estate investment.

For more information on using a self-directed IRA LLC to buy real estate, please contact a tax professional at 800-472-0646.

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Nov 17

The Roth IRA May Be Big Winner In 2016 Presidential Election

This article originally appeared on Forbes.com:

With the 2016 presidential election behind us, we can all start thinking about what this country will look like under President Donald Trump.  Notwithstanding all the pre-election campaign rhetoric about immigration, foreign policy, etc., one thing we are quite certain about is that President-Elect Trump is serious about reducing personal income and corporate tax rates across the board.  Both President-Elect Trump and House Speaker Ryan have put forth proposed tax reform plans and lawmakers will likely consider both plans when coming up with future American tax policy.

What we currently know is that both Trump and Ryan promise the lowest tax rate since before World War II and to shrink the personal income tax brackets from seven down to three.  Under the Trump plan, there would be three income tax rate brackets, 12%, 25%, and a top rate of 33%, which is lower than the current highest income tax rate of 39.6%.  Capital gain tax rates will remain much as they are, with a top tax rate of 20% under the Trump plan.  However, the biggest change under the Trump tax plan from the current tax system, is that business income of a taxpayer will be taxed at 15%. Whereas, the Trump and Ryan plan would make it difficult for individuals to benefit from specific deductions, as both plans raise the standard deduction limit.

Overall we should expect that a Trump Presidency will usher in lower personal and business taxes for most Americans.  So what does that mean for your retirement account contributions?  In general, when an individual is deciding to make IRA or pension contributions, such as to an employer 401(k) plan, the biggest question is generally whether contributions should be made in pre-tax or Roth.

A pre-tax IRA or 401(k) plan contribution provides the individual making the contribution with a current income tax deduction for the amount of the contribution, but the retirement account holder would ultimately be liable for income tax on any income taken out of the retirement account, with a 10% early distribution penalty if done prior to the age of 591/2.  Whereas, a Roth IRA or Roth 401(k) plan contribution is made with after-tax funds, meaning there is no immediate income tax deduction when the contribution is made, but if the retirement account holder is able to keep the Roth account opened at least five years and wait until reaching the age of 591/2, all Roth IRA or 401(k) funds can be taken out tax-free.  The Roth IRA does have an income limitation threshold, which is $194,000 for married couples filing jointly, but a backdoor way does exist for those individuals to still make Roth IRA contributions.

When a tax professional helps a client decide between making a pre-tax or Roth IRA or 401(k) plan contribution, one of the primary items the advisor will look at is the financial impact a deduction will have on the taxpayer’s income tax liability. The general thinking goes that if there is less tax to pay then taking a tax deduction would have less of a financial impact than in a higher tax environment, For example, if an individual earns $40,000 in annual income, under the Trump tax plan he or she would be subject to $4800 in taxes, versus a 25% income tax rate in 2016.

Sure, the IRA contribution deduction would be beneficial in reducing any income tax due, but such a deduction would likely have a lower financial impact on the taxpayer than with higher tax rates likely making the Roth contribution a more attractive option for many taxpayers.  The Trump victory and a low tax income policy will likely lead more tax advisors to consider and recommend the Roth IRA or Roth 401(k) contribution over a pre-tax retirement contribution.  Lower tax rates generally means income tax deductions carry less value. Weighing the financial loss of a current income tax deduction versus the super benefit of tax-free growth in a Roth IRA should make Roth contributions the popular choice for more Americans than ever before.

Some people will argue that lower tax rates means that saving money in a tax free retirement account, such as a Roth, will have less value since there would be less tax due on a distribution and the individual would likely be in a lower tax bracket at the retirement age of distribution. This argument ignores the fact that a Trump presidency will likely bring tax rates to historical lows, which for many Americans looking to retire in the next ten or twenty years, will likely mean a future with higher taxes.

It is unclear what type of impact a Trump presidency will have on the country and the entire world, but a Trump tax plan based on lower domestic income tax rates should make Roth contributions the big winner for many U.S. retirement account holders.

For more information about the Roth IRA, please contact an IRA Expert at the IRA Financial Group @ 800.472.0646.

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Nov 15

How is UDFI Calculated with a Self-Directed IRA Asset?

A Self-Directed IRA allows you to invest in alternate investments such as real estate.  Property is debt-financed if it is held for the production of income, its use is not substantially related to the organization’s exempt purposes, and there is acquisition indebtedness with respect to the property. The term “acquisition indebtedness” generally includes any liability incurred before, contemporaneously with, or after the acquisition or improvement of the property if it arose because of the acquisition or improvement or if the need for the indebtedness was foreseeable at the time of the acquisition or improvement.  This is where the Unrelated Debt Financed Income, or UDFI, rules come into play.

How is UDFI Calculated with a Self-Directed IRA Asset?When a debt-financed asset is sold, a special rule applies for the purpose of calculating the taxable gain. The property’s average adjusted basis is the average of the adjusted basis as of the first day during the year in which the property is held by the organization and on the day the property is sold or disposed of. The percentage of gain taxed is the percentage that the average adjusted basis on sale or other disposition of debt-financed property is of the highest amount of acquisition indebtedness with respect to the property during the twelve-month period ending with the date of the sale or other disposition. The regulations permit adjustments to basis that include decreases in basis for depreciation for periods since the acquisition of the property and increases in basis for capitalized improvements or additions.

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

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Nov 14

Rolling Over an IRA

Individuals may generally rollover their retirement savings between eligible defined contribution plans, defined benefit plans and pre-tax IRAs, including SEP IRAs and SIMPLE IRAs to a Self-Directed IRA. Eligible defined contribution plans include qualified 401(k) retirement plans under Internal Revenue Code Section 401(a), 403(a), 403(b), and governmental 457(b) plans. Individuals may also roll over after-tax retirement funds to a Roth Self-Directed IRA.

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

Transfers and rollovers are types of transactions that allow movements of assets between like IRAs – Traditional IRA to Traditional IRA and Roth IRA to Roth IRA. An IRA transfer is the most common method of funding a Self-Directed IRA LLC or Self-Directed Roth IRA.

IRA Transfers to a Self-Directed IRA

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

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

How the Self-Directed IRA Transfer Works?

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

Moving 401(k) Plan & Qualified Retirement Plan Assets to a Self-Directed IRA

The 2001 Economic Growth and Tax Relief Reconciliation Act expanded the rollover opportunities between employer-sponsored retirement plans, such as 401(k) Plans and IRAs. Since 2002, individuals may rollover both pre-tax and after-tax 401(k) Plan fund assets from a 401(a), 403(a), 403(b), and governmental 457(b) plans into a Traditional IRA tax-free and penalty-free.

In general, in order to rollover qualified retirement plans to a Traditional IRA there must be a plan-triggering event. A plan-triggering event is typically based on the plan documents, but they generally include the following: (i) the termination of the plan, (ii) the plan participant reaching the age of 591/2, or (iii) the plan participating leaving the employer.

A Direct Rollover to a Self-Directed IRA

A direct rollover transpires when a plan participant, who has access to his or her retirement funds, moves the eligible qualified retirement plan funds to an IRA custodian. In other words, a direct rollover is between a qualified retirement plan and an IRA, whereas, a transfer is between IRA financial institutions. In general, employer 401(k) plan providers must offer the direct rollover option if it is reasonable anticipated that the total amount of eligible rollover distributions to a recipient for the year would be more than $200.

How to Complete a Direct Rollover

Your assigned retirement tax professional will work with you to establish a new Self-Directed IRA account at a new FDIC and IRS approved IRA custodian. With a direct rollover from a defined contribution plan, the plan participant must initiate the direct rollover request. What this means is that the plan participant must request the movement of 401(k) plan funds to the new IRA custodian, not the IRA custodian, like with an IRA transfer. Your assigned retirement tax professional will assist you in completing the direct rollover request form which will allow you to move your 401(k), 403(a), 403(b), 457(b), or defined benefit plan assets to your new IRA account.

A direct rollover may be accomplished by any reasonable means of direct payment to an IRA. Regulations state that the reasonable means may include, wire, mailing check to new IRA custodian, or mailing check made out to new IRA custodian to plan participant.

Reporting a Direct Rollover

When an individual directly rolls over a qualified retirement plan distribution to a Traditional IRA, the employer is generally required to report the distribution on an IRS Form 1099-R, using Code G in Box 7, Direct rollover and rollover contribution. The receiving IRA administrator would them be required to report the amount as a rollover distribution in Box 2 of IRS Form 5498.

Rollover Chart

Click the image below to view the Rollover Chart.

IRA Rollover Chart

An Indirect Rollover to a Self-Directed IRA

An indirect rollover occurs when the IRA assets or qualified retirement plan assets are moved first to the IRA holder or plan participant before they are ultimately sent to an IRA custodian.

60-Day Rollover Rule

An individual generally has sixty (60) days from receipt of the eligible rollover distribution to roll the funds into an IRA. 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 an 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 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 IRA custodian within the 60-day period, the new custodian will be able to invest the IRA assets into the new IRA LLC “checkbook control” structure. Once the funds have been transferred to the new IRA LLC, you, as manager of the 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 from an Employer Retirement Plan

In general, when a plan participant requests a distribution from an employer qualified retirement plan. IRS rules require the employer to withhold 20% from the amount of the eligible rollover distribution. If an individual receives an eligible rollover distribution and then elects to rollover the assets to an IRA custodian within 60 days, the individual can make up the 20% withheld by the employer retirement plan provider for federal income tax purposes.

Employer sponsored retirement plans are required to withhold at a rate of 20% on all eligible rollover distributions of taxable funds or assets, unless the participants elects to directly rollover the distribution to an IRA or to another eligible retirement plan. In other words, when taking an indirect rollover from an employer qualified retirement plan, the employer is required to withhold 20% of the eligible rollover distribution. The 20% withholding requirements is not applicable for IRA-to-IRA transfers or for direct rollover distributions.

Reporting Indirect Rollovers

When an individual takes a distribution from an employer sponsored retirement plan, such as 401(k) Plan, the employer should make the individual, even if the individual intends to roll the funds over to an IRA. The employer would be required to withhold 20% from the eligible rollover distribution since the funds will be rolled to the plan participant and not directly to the IRA or qualified retirement plan custodian. The employer (payer) would report the indirect distribution on IRS Form 1099-R, using the applicable distribution Code (1,4, or 7). If the funds are deposited with an IRA custodian within 60-days, the receiving IRA custodian would report the rollover assets on the IRS Form 5498 as a rollover contribution in Box 2.

Self-Directed IRA Transfer & Rollover Experts

The retirement tax professionals at the IRA Financial Group will assist you in determining how best to fund your Self-Directed IRA or Self-Directed Roth IRA LLC structure. Whether it’s by IRA transfer or direct or indirect rollover, each client of the IRA Financial Group will work directly with an assigned retirement tax professional to make sure his or her Self-Directed IRA LLC structure is funded in the most tax efficient manner.

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

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Nov 10

Trump Victory and Prospect of Reduced Corporate Tax Rates Expected To Increase Popularity of Rollover Business Start-Up Solution

Reduced corporate tax rates will help thousands of Americans use retirement funds tax-free to fund a business via ROBS

IRA Financial Group, a provider of Rollover Business Startup Solution (“ROBS”) solutions, expects to see a surge in the popularity of the ROBS solution based on Donald Trump’s Presidential Election victory. Mr. Trump’s tax plan has called for a reduction of tax rates on corporations.

The rollover business start-up (“ROBS”) arrangements typically involves rolling over a prior IRA or 401(k) plan account into a newly established 401(k) plan, which a start-up C Corporation business sponsored, and then investing the rollover 401(k) Plan funds in the stock of the new C Corporation. The funds are then deposited in the C Corporation bank account and are available for use for business purposes. The ROBS solution is a tax efficient way for any entrepreneur looking to use IRA fund to buy a business or franchise without incurring any tax or penalty from an IRA distribution. “With the expectation of reduced corporate tax rates, operating a business via a C Corporation will become more tax efficient and should increase the popularity of the ROBS solution with entrepreneurs looking to use retirement funds to buy a business,” stated Adam Bergman, a partner with the IRA Financial Group.Trump Victory and Prospect of Reduced Corporate Tax Rates Expected To Increase Popularity of Rollover Business Start-Up Solution

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 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.

IRA Financial Group proudly announces the latest book titled written by tax partner Adam Bergman, Turning Retirement Funds into Start-Up Dreams – financing and retirement funding options for your start-up business is now available for purchase on Amazon.

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 08

Can You Rollover Funds from One IRA to Another 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.

Can You Rollover Funds from One IRA to Another 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.

 

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

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Nov 07

What Type of Business Can I Purchase Using my IRA?

Leaving your job or thinking of leaving your job and have an IRA plan? Why not use your IRA to invest in yourself instead of a falling stock market? Why put your hard earned retirement funds in the hands of Wall Street when you can use your IRA funds on a business you can run, manage, and even earn a salary from?

With IRA Financial Group’s Business Acquisition structure, a new C Corporation is formed which will adopt a 401(k) Qualified Plan. Your existing retirement funds can then be rolled into the newly adopted 401(k) Plan tax-free. The 401(k) Plan will then purchase the stock of the new corporation. The new corporation will then use those funds to purchase a new business or franchise tax-free!

What Type of Business Can I Purchase Using my IRA?With the IRS compliant Business Acquisition Structure (“BACSS”), you can earn a reasonable salary from your new business or franchise. You can also use your new 401(k) Plan to make high tax-deductible contributions – $53,000 ($59,000 if you are over the age of 50) or even borrow up to $50,000 for any purpose.

With the BACSS you are permitted to purchase almost any legal business or franchise. Whether you are starting a new business/franchise or buying an existing business, the BACSS will allow you to accomplish your business goals tax-free and without penalty.

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

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