Oct 31

IRA Financial Group Introduces IRS Prohibited Transaction Consultation Services for All Self-Directed IRA Clients

Self Directed IRA investors can now receive expert advice on the IRA prohibited transaction rules regarding the IRS rules for making investments using retirement funds

The IRA Financial Group, the leading facilitator of self-directed IRAs with checkbook control has launched a new tax consultation services called “Self-Directed & IRS Protected” aimed specifically for the self-directed IRA investor. With the increased popularity in using self directed IRAs to make investments, such as real estate, an increasing number of individuals with retirement funds have been seeking expert tax consultation on the IRS prohibited transaction and “disqualified person” rules surrounding the use of retirement funds to make non-traditional investments, such as real estate. As a result, the IRA Financial Group has designed the consultation service called “Self-Directed & IRS Protected” specifically for the self-directed IRA investor. “ When making a non-traditional investments with retirement funds, we at the IRA Financial Group believe it is crucial that all our clients are able to confirm that the proposed transaction is not in violation of any of the IRS prohibited transaction rules, “ stated Adam Bergman, a tax attorney with the IRA Financial Group. “Because a self directed IRA investment requires the understanding of various tax rules which are based off the Internal Revenue Code and tax court cased, it is imperative that each of our clients is able to have their IRA transaction reviewed by a tax professional,” stated Mr. Bergman.

IRA Financial Group Introduces IRS Prohibited Transaction Consultation Services for All Self-Directed IRA Clients When it comes to making investments using a self directed IRA, the Internal Revenue Code does not describe what a self directed IRA could invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits IRS Disqualified Persons from engaging in certain type of transactions. The purpose of these rules is to encourage the use of qualified retirement plans for accumulation of retirement savings and to prohibit those in control of self directed from taking advantage of the tax benefits for their personal account. “Our tax consultation service is predicated on working with the client to structure the most tax efficient self directed IRA transaction,” stated Susan Glass, a tax professional with the IRA Financial Group.

Clients of the IRA Financial Group will be automatically enrolled in our “Self-Directed & IRS Protected” self directed IRA tax consultation service. Each client will have direct and unlimited access to our in-house tax and ERISA professionals. Each client of the IRA Financial Group is assigned a tax professional in order to ensure that the self directed IRA transaction is established is in compliance with IRS rules. “Our clients have worked hard their whole life for their retirement funds and we are dedicated to offering individualized tax consultation regarding the IRS prohibited transaction rules”, stated Susan Glass of 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 and Dewey & LeBoeuf LLP.

IRA Financial Group is the market’s leading “Checkbook Control” Self Directed IRA and Solo 401k Plan Facilitator. We have 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 tax-free and 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.

Oct 29

Dealing With RMDs in Your IRA

If you have a traditional IRA, you enjoy tax-deferred savings…that is until you reach age 70 1/2.  Once there, you are required to start withdrawing from the account, whether you need the money or not.  These are what’s known as required minimum distributions, or RMDs.  Here we’ll tell you what you need to know about them.

First off, why are they required?  When contributing to a traditional plan, you do not pay taxes on those amounts each year.  Instead, the taxes are deferred until you withdraw from the account.  However, some people do not need the money during retirement or they want to leave it to a beneficiary.  The government thinks you’ve avoided paying taxes long enough, so when you turn 70 1/2, you must start withdrawing money from your IRA and paying the taxes on that amount.  Failure to take the full RMD will result in a hefty 50% penalty on the amount that should’ve been withdrawn plus interest.

Don't forget to take your RMD from your IRAWhen taking your first RMD, you have until April 1 of the year after you turn 70 1/2.  Each subsequent RMD must be taken by December 31.  Like all distributions from the IRA, RMDs are treated as ordinary income which may effect your tax rate.  This is especially true if you push your first one into the following year.  You still have to take your next RMD by the last day of the year meaning you would have taken two RMDs which could greatly effect your taxes and tax rate.

Now, how do you figure out your RMD?  You must take the December 31 ending balance of each IRA you own and divide it by your life expectancy factor as found in Appendix C of IRS Publication 590.  The IRS also provides a worksheet you can use when figuring out your RMD.  Lastly, FINRA provides a calculator you can use as well.  Even though you have to figure out the RMD from each IRA you own, you do not have to take the amount from each plan.  You may opt to take the total RMD from one account.  This can be a poor performing account or one that needs rebalancing.

It’s important to note that if you have 401(k) plans, RMDs must be taken from each account individually.  It’s a good plan to rollover your old 401(k)’s to an IRA and only maintain one 401(k) plan if you are still working.

Lastly, here are a few strategies you can utilize to lessen the effect that RMDs will have on you.  If you are already 70 1/2, one thing you can do for this year is a qualified charitable distribution, or QCD.  You can make a cash donation of up to $100,000 to an IRS-approved public charity.  It can be taken from your IRA as part of your RMD but it will not be included in taxable income.  This option probably won’t be extended into next year, so if you don’t need the money, you can help out a deserving charity.

Another option is to convert your traditional assets into a Roth IRA.  You pay the taxes on the amount converted, but there are no RMDs on Roth plans.  Note that beneficiaries to a Roth will have RMDs later on.

Finally, you can start to draw down your account before you reach age 70 1/2.  Once you are age 59 1/2, you can start withdrawing from your retirement plans penalty-free.  Withdraw as much as you can without pushing you into a higher tax bracket so that your account balance is less and therefore your RMDs won’t be as much.

RMDs are a fact of retirement savings, so make sure you are prepared for them when the time comes.  The tax experts at the IRA Financial Group can help you figure out the best plan when it comes to your retirement.  Give them a call @ 800.472.0646 or visit their website today!

Oct 25

Experience the Self-Directed IRA LLC “Checkbook Control” Advantage

Many traditional IRA custodians advertise themselves as offering a Self-Directed IRA, but what that really means is that you will need approval from your custodian before making an investment. Whereas, in the case of a truly Self-Directed IRA, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder providing the IRA holder with “checkbook control” over his or her funds.

Experience the Self-Directed IRA LLC “Checkbook Control” AdvantageIn general, there are three categories of self-directed IRA structures distinguishable by the level of control the custodian exercises over your IRA investments.

1. Financial Institution Self-Directed IRA

With a financial institution self-directed IRA, you are able to direct your IRA investments, however, you are generally limited to investing in the financial products offered by the financial institution. For example, a financial institution such as Vanguard or Fidelity will allow you to select the type of investments for your IRA, but your choices would generally be limited to the financial products they offer, such a stocks, mutual funds, and bonds. With a financial institution self-directed IRA, you will not be permitted to make non-traditional investments such as real estate, precious metals, private business investments, foreign currency, options, etc.

2. Custodian Controlled Self-Directed IRA Without “Checkbook Control”

With a custodian controlled Self-Directed IRA without “Checkbook Control”, many types of nontraditional investments, such as real estate, are generally permitted, however, custodian consent is required in order to enter into and execute the transaction. This typically results in long delays and high custodian fees associated with the transaction. For example, before engaging in an IRA investment, you will be required to receive the consent of the custodian. To this end, you will be required to provide the custodian with the transaction documents for review as part of their transaction review process. As a result, it is common to experience time delays as well as high annual fees as well as additional transaction fees. For example, it is common for a moderately active investor with $50,000 in assets with a Self-Directed IRA custodian without checkbook control to end up paying from $400 to $600 in aggregate annual fees (i.e. account value fee, transaction fees, approval letters).

In addition, there is no guarantee that the custodian will approve your investment even though the investment would not violate IRS rules. Overall, with a custodian controlled self-directed IRA, even though you will generally be permitted to make most non-traditional IRA investments, time delays and high custodian fees are the common characteristics of using a custodian controlled self-directed IRA.

3. Self-Directed IRA LLC with “Checkbook Control”

With a truly Self-Directed IRA, 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. 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. A truly 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 LLC, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder. The IRA Holder’s IRA funds are then transferred by the Custodian to the LLC’s bank account providing the IRA holder with “checkbook control” over his or her IRA funds.

The Self-Directed IRA LLC “Checkbook Control” Structure has been in use for over 30 years. The notion of using an entity owned by an IRA to make an investment was first reviewed by the Tax Court in Swanson V. Commissioner 106 T.C. 76 (1996). In Swanson, the Tax Court, in holding against the IRS, ruled that the capitalization of a new entity by an IRA for making IRA related investments was a permitted transaction and not prohibited pursuant to Code Section 4975. The Swanson Case was later affirmed by the IRS in Field Service Advice Memorandum (FSA) 200128011.

With a Self-Directed IRA LLC with “Checkbook Control”, 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.

Financial Institution Self-Directed IRA

Custodian Controlled Self-Directed IRA Without “Checkbook Control”

Self-Directed IRA LLC with “Checkbook Control”

Traditional investments options (stocks, mutual funds, etc.)

Yes

Yes

Yes

Nontraditional Investment options (i.e. real estate, precious metals, tax liens, etc)

No

Yes

Yes

Unlimited Investment Options

No

No

Yes

All Investments must be approved by the custodian

N/A

Yes

No

True “checkbook control”

No

No

Yes

Direct Access to your Retirement Funds

No

No

Yes

Limited Liability

No

No

Yes

High annual account fees

No

Yes

No

Transaction fees

No

Yes

No

Bankruptcy Protection of up to $1 million

Yes

Yes

Yes

For more information, please contact a tax expert at the IRA Financial Group @ 800.472.0646 or visit our website now!  Don’t forget to like us on Facebook & follow us on Twitter!

Oct 23

The IRS May Be Coming After Your IRA

Previously, if you made an error with your IRA, you could correct the mistakes, let the IRS know and not face stiff penalties.  However, the government is looking for new ways to get revenue and the days of a lenient IRS may be in the past.  The IRS is meeting with the Treasury Department to show how they are going after those who make mistakes with their IRAs.  These rules are already in the books so they should come as no surprise, but they will be more strictly enforces in an attempt to give the government more money.  Here are some common mistakes you should be aware of concerning your IRA.

The IRS may be coming after your IRAOne of the most common mistakes is over-contributing to your IRA.  Each year, there is a set amount you are allowed to contribute to a retirement plan.  For 2012, the maximum allowed contribution to your traditional or Roth IRA was $5,000 if you were under age 50 and $6,000 if you were age 50+.  Those limits increased by $500 for 2013.  If you contribute more than you are allowed, you will be hit with a 6% penalty on the amount that was in excess of the limits.  That penalty will continue year after year until you fix the problem.

Further, there are income limitations for those that contribute to a Roth IRA.  Make too much money and you cannot directly contribute to one.  The income limit for 2012 was $110,000 for single filers and $173,000 for joint filers.  In 2013, those limits were increased to $112,000 & $178,000 respectively.  The simple fix is to re-characterize the contribution into a traditional plan.

Next, is forgetting to take your mandatory distributions.  If you contribute to a traditional, SEP or SIMPLE IRA, you must start taking required minimum distributions or RMDs by April 1 (not April 15 like many assume) the year after you turn age 70 1/2.  Subsequent distributions must be taken by December 31.  Therefore, if you delay your first RMD to January 1 or later, you will need to take two distributions that year.  The penalty for not taking your RMD is 50% of the amount that should have been withdrawn.  Your best bet is to set up automatic distributions once you reach that age.

Then there are those who are the beneficiary of a decedent’s IRA.  If you are not the spouse of the decedent and inherit his or her IRA, you cannot roll it into your own IRA.  You need to create an inherited IRA and take required distributions from the account.  If you cash it out, you lose the tax advantages of the IRA.

If you contribute to an IRA (or other retirement plans), you must be aware of the rules that govern them.  To be on the safe side, it’s best to spend a little money now on the services of an expert to be sure you don’t cost yourself a lot of money later.  The tax experts at the IRA Financial Group have decades of experience and will guarantee your retirement plan(s) adhere to the laws that govern them.  Give them a call @ 800.472.0646 or visit their website today!

Oct 21

IRS Recognition of Same-Sex Marriage Creating Greater Demand for Self-Directed IRAs for Same-Sex Couples

Recent recognition by IRS of same-sex couples is creating retirement planning opportunities for same-sex couples

IRA Financial Group, the leading provider of self-directed retirement solutions, such as the self directed IRA and solo 401(k) Plan, has seen an increasing number of same-sex couples turn to the self-directed IRA for retirement planning opportunities, according to Adam Bergman, a tax attorney with the IRA Financial Group.

IRS Recognition of Same-Sex Marriage Creating Greater Demand for Self-Directed IRAs for Same-Sex Couples, According to IRA Financial Group Tax Attorney According to Mr. Bergman, previously, same-sex married couples didn’t have the same spousal-IRA benefits as other married couples. More than three months after the U.S. Supreme Court struck down a key portion of the Defense of Marriage Act, known as DOMA, same-sex married couples face some significant changes in the rules involving tax-deferred retirement accounts.

In response to the DOMA ruling, in August 2013, the Internal Revenue Service said it would recognize all same-sex marriages in the U.S. for federal tax purposes. The U.S. Department of Labor issued similar guidance in September. “The recognition by the IRS and DOL of same-sex marriages have opened up some retirement tax planning opportunities for same-sex couples, “ stated Mr. Bergman.

According to Mr. Bergman, “one of the new retirement tax planning opportunities for same-sex couples is that all the special rules that apply to any spouse now apply to same sex-couples, such as the ability to fund a spousal IRA for a nonworking spouse, up to the maximum of $5,500 a year (or $6,500 for those 50 or older).”

In the case of a same-sex widow, according to Mr. Bergman, the spouse can inherit a spouse’s IRA, which they can roll it into their own IRA increasing the potential tax deferral and potentially minimizing the exposure to required minimum distributions.

According to Mr. Bergman, with the recognition by the IRS and DOL of same-sex marriages, more and more same-sex couples are looking to retirement accounts, including the self-directed IRA, as an important vehicle for tax, retirement, and estate planning.

The primary advantage of using a Self Directed IRA LLC and Solo 401(k) Plan to make investments is that all income and gains associated with the IRA investment grow tax-deferred.

Using IRA Financial Group’s self directed IRA LLC with “checkbook control” solution to make traditional as well as non-traditional investments, such as real estate offers a number of very interesting investment opportunities, including the ability to diversify ones retirement portfolio with real estate, precious metals, and other alternative investment options.

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.

Oct 18

Rules for Rolling Over a Traditional IRA to a Roth IRA

Before 2010, there were income restrictions as to who was allowed to convert to a Roth IRA.  However, since then, the limits are no more and anyone can convert a traditional IRA to a Roth IRA at anytime.  The difference between the two types of plans are when taxes are paid.  Traditional plans are funded with pre-tax money (distributions will be taxed) while Roth options are funded with after tax dollars (distributions are generally tax-free).

Rules for rolling a traditional IRA into a Roth IRAThere are two ways to move money from your traditional IRA to a Roth IRA: a rollover or a transfer.  If you choose a rollover, you take a distribution in the amount you want to move.  You then have 60 days to deposit the money into your Roth plan.  Failure to meet this time frame will result in penalties.  This is a decent solution if you need the money short term but will have it back within the 60 day period.  If you choose to do a transfer, you never receive the money being moved.  It goes directly from your traditional plan straight to your Roth IRA, even if you are switching custodians.

Whatever amount you convert will be considered taxable income.  This would be the same if you simply took a distribution from your traditional IRA without converting it.  If your traditional IRA has nondeductible contributions, you may prorate your conversion.  So, if your IRA has 20% in nondeductible contributions, then that same 20% of your conversion will be tax-free.

Be careful of the tax trap that could see more money out of your pocket than necessary.  It’s best not to use any of the money you are converting to pay the taxes that are due.  The money you would use to pay the taxes is not converted and therefore is treated like a taxable distribution.  If you are under age 59 1/2, you will owe a 10% early withdrawal penalty on top of the taxes due.  Wait to perform the conversion until you have enough cash on hand to pay all the taxes.

When you transfer money to a Roth IRA, there’s a five year waiting period to withdraw the money penalty-free.  Further, it must be a qualified distributions to avoid any penalty.  These include permanent disability, first time home buying or after you reach age 59 1/2.  Therefore, you cannot transfer the money to a Roth and then immediately withdraw from the account.

There are many factors in determining which type of IRA is best for you.  The IRA experts at the IRA Financial Group can help determine if you are better off leaving money in a traditional plan or if a Roth conversion is right for you.  Give them a call at 800.472.0646 to speak with a qualified professional!

Oct 16

Fear of Government Shutdown Causing Retirement Investors to Turn to Self-Directed IRA

Risk of a Government shutdown and debt ceiling attracting retirement investors to the real estate IRA and away from Wall Street

IRA Financial Group, the leading provider of self-directed retirement solutions, such as the self-directed IRA LLC and solo 401(k) Plan, has seen an increasing number of retirement investors looking to make alternative investments with their retirement funds, including real estate, in light of a government shutdown and its potential impact on the equity markets, according to a recent survey.

Fear of Government Shutdown Causing Retirement Investors to Turn to Self-Directed IRA“Retirement investors have been recently turning their attention to looking for safe alternatives to invest their retirement funds in light of the potential government shutdown and its potential impact on the stock market “ stated Adam Bergman, a tax attorney with the IRA Financial Group. “We have seen a surge in new self-directed IRA and Solo 401k clients looking to make alternative investments with their IRA and 401(k) funds, including real estate to protect themselves from the impact of a government shutdown“ stated Mr. Bergman, a tax attorney with the IRA Financial Group.

The primary advantage of using a Self Directed IRA LLC or Solo 401(k) Plan to make investments is that all income and gains associated with the IRA investment grow tax-deferred.

Using IRA Financial Group’s self directed IRA LLC or Solo 401(k) Plan with “checkbook control” solution to make real estate investments offers a number of very interesting investment opportunities, including the ability to diversify ones retirement portfolio with real estate, precious metals, and other alternative investment options. “By using IRA or 401(k) funds to make real estate IRA investments, retirement investors can better diversify their retirement assets from the risks associated with a government shutdown, “ stated Mr. Bergman. With IRA Financial Group’s self directed IRA LLC or Solo 401(k) Plan solution, retirement investors now have a safe and viable option for better protecting and diversifying their retirement funds from a vulnerable stock market, “ stated Mr. Bergman

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.

Oct 15

Comparing the SEP IRA to the Solo 401k

We are nearing the end of the year and if you’re self-employed and don’t have a retirement plan in place, now is the time to get one.  Here we will focus on two options, the Simplified Employee Pension or SEP IRA and the Solo 401(k) plan.  Each has it’s own pros and cons and one of them may be more suited to your particular needs.

The SEP IRA is a great retirement plan option for small business ownersFirst off, the SEP IRA.  You can open this type of plan at virtually any major custodian.  You can invest in anything you can with a standard IRA account.  You can contribute to the plan up until your tax deadline and any extensions.  For most people, that day is today, October 15.  There are very little reporting requirements.  For 2013, you may contribute up to 25% of compensation or $51,000, whichever is less.  All contributions are made by the business itself; meaning employees (if you have any) do not contribute directly to the plan.

As for the Solo 401(k), it includes both an employee deferral program and an employer deferral piece.  The combined contribution limit is $51,000 for 2013 plus another $5,500 if you are at least age 50.  They too can be opened up at most major custodians.  They are limited to solo employees, spouses and business partners.  If you have other employees that work for you, you cannot utilize the Solo 401(k) plan.

Let’s compare and contrast these two different plans.  As stated, the Solo 401(k) is primarily for sole proprietors while the SEP IRA can be used if you have employees.  It could get expensive if you have many employees since you have to contribute on their behalf the same percentage you defer for yourself.  Each plan will allow you to contribute up until you tax filing date, including extensions, for the prior tax year.  You must establish a solo 401(k) plan by the end of the calendar year.

You SEP IRA contribution is calculated as a percentage of compensation.  Therefore, if your compensation fluctuates from one year to the next, so will the amount you are allowed to contribute to a SEP.  On the other hand, you may contribute up to $17,500 ($23,00 if you are age 50+) to a Solo 401(k) plan in addition to the profit sharing contribution.  This is a better option for those looking to put aside more money for retirement.

Two other advantages of the Solo 401(k) is the available loan option or the Roth option.  You can take a loan out at anytime from your 401(k) plan; you cannot take a loan from your SEP IRA.  Also not found in the SEP IRA is the Roth feature which allows you to contribute after-tax dollars to your 401(k) and see tax-free withdrawals during retirement.  This is assuming your custodian allows for a Roth feature.

Both types of plans are easily maintained with limited paperwork involved.  They can each be opened at your usual financial institutions and investment options run in line with most other plans out there.

Depending on your unique situation and business, one of these plans might work for you or another option might be better.  The tax professionals at the IRA Financial Group can break down each type of plan and figure out which one is more advantageous to you.  Give them a call at 800.472.0646 or visit their website today to see all available plan options they offer.

Oct 10

When & How to Recharacterize a Roth Conversion

First off, what’s the difference between a traditional IRA and a Roth IRA?  Traditional plans are funded with pre-tax money giving you an immediate tax break, but all withdrawals are taxed at your current tax rate.  Roth plans however are funded with after-tax money meaning there is no immediate tax benefit, but withdrawals during retirement are generally tax-free.  At anytime you can convert your traditional plan to a Roth IRA so long as you pay the taxes on the money that’s converted.

You have the ability to undo a Roth IRA conversionNow the question is why would you want to convert to a Roth IRA?  The main reason is if you think you’ll be in a higher tax bracket later on in life.  Also, if for some reason you didn’t earn as much money during a particular year (unemployed, no bonus, etc.), you can pay the taxes now and have tax-free withdrawals later on.  It all comes down to the tax hit.  If you think taxes will increase in the future, pay them now while they’re low.  Don’t pay higher taxes when you don’t have to.

If for some reason, you want to undo the conversion, you are allowed to as long as you follow the deadlines.  This is what’s called a recharacterization.  When would this be a good idea for you?  If the market dropped substantially, you would pay more tax than if you waited until after the drop.  You may also realize that you cannot afford to pay the tax due on the transfer by the tax deadline.  Lastly, the income created by the transfer may make you ineligible for other credits you may have received otherwise.  No matter the reason, you are allowed to undo the transfer within a specific time-frame.

The deadline to undo the Roth conversion is straight forward, you have until Tax Day, April 15, of the following year to recharacterize.  This is when the taxes come due on the money transferred from your traditional IRA into the Roth IRA.  If you fail to do so before this date, the conversion cannot be undone and you must pay the taxes that are due.  The process itself is fairly simple.  You simply fill out some forms from your IRA custodian to transfer back to the original plan.  If you closed the plan, you open up a new one to accept the funds.  Note that you don’t have to undo the entire transfer, you can do any portion you wish.  You will then fill out a 1099-R for both the original transfer and the recharacterization so the IRS knows how much was undone.

There is no net tax impact on the amount you recharacterized.  Any amount that stands, or if you fail to meet the deadline, will be taxed according to your current bracket.

The ability to undo an IRA conversion is quite beneficial.  If you have any questions regarding this or anything else IRA-related, contact one of the tax pros at the IRA Financial Group @ 800.472.0646 today!

Oct 07

The “American Eagle” Retirement Plan Solution for Shielding Retirement Assets from Unstable Financial Markets

Solo 401(k) Plan & Self-Directed IRA retirement solution allows for the physical possession of American Eagle Coins with retirement funds.

IRA Financial Group, the leading provider of solo 401(k) Plan and self-directed IRA LLC solutions, announces the introduction of a new retirement solution specifically geared towards retirement investors looking to shield their retirement assets from the looming fiscal cliff and financial insecurity caused by the debt ceiling debate. The “American Eagle” retirement plan solution is focused on using retirement funds to purchase American Eagle coins with a solo 401(k) Plan or self-directed IRA LLC and then take personal possession of the coins. “The “American Eagle” Retirement Plan solution is perfect for any retirement investor looking to take more control over their retirement funds by gaining the opportunity to take personal possession of their retirement assets while be able to diversify their retirement portfolio from financial market instability, “ stated Susan Glass, a tax professional with the IRA Financial Group.

Internal Revenue Code Section 408(m) lists the type of precious metals and coins that are permitted investments using IRA funds:

  •     One, one-half, one-quarter or one-tenth ounce U.S. gold coins (American Gold Eagle coins are the only gold coins specifically approved for IRAs). Other gold coins, to be eligible as IRA investments, must be at least .995 fine (99.5% pure) and be legal tender coins.
  •     one ounce silver coins minted by the Treasury Department;
  •     any coin issued under the laws of any state;
  •     a platinum coin described in 31 USCS 5112(k); and
  •     gold, silver, platinum or palladium bullion (other than bullion that is made into a coin) of a certain fineness that is in the physical possession of a trustee that meets the requirements for IRA trustees under Code Sec. 408(a).

IRA Financial Group Introduces the “American Eagle” Retirement Plan Solution for Shielding Retirement Assets from Unstable Financial MarketsThe Technical and Miscellaneous Revenue Act of 1998 allowed IRA owners to invest their IRA assets in certain platinum coins as well as certain gold, silver, platinum, or palladium bullion provided the precious metals are held in the physical possession of the financial organization or depository. With respect to state minted coins, the coins must be held in the possession of a third-party other than the IRA holder. The Technical and Miscellaneous Revenue Act of 1998 does not state that the third-party holding the state minted coins must be a bank, but the holder must not be the IRA holder. However, in the case of American Eagle coins, there does not seem to be a “physical possession” requirement as precious metals or a restriction on possession by the IRA holder as in the case of state minted coins. “In light of the risk of a Government shutdown and its potential negative impact on the U.S. financial markets, we have seen an increase demand in retirement investors looking to use their retirement funds to buy and personally hold IRS approved coins, “ stated Adam Bergman, a tax attorney 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.

IRA Financial Group is the market’s leading provider of “checkbook control” Self Directed IRA LLC and Solo 401(k) Plans. 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, including the ability to use a self-directed IRA to purchase coins.

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