Apr 30

IRA Financial Group Expands Annual Compliance Services for Self-Directed IRA Real Estate Clients

Self Directed IRA investors can now receive expert tax advice from a tax professional or CPA regarding federal tax filings and the IRS rules for making investments using retirement funds

The IRA Financial Group, the market’s leading provider of self-directed IRAs with checkbook control, has launched an expansion of its annual self-directed IRA LLC consulting services to include advisory services regarding federal tax filings specifically for the self-directed IRA LLC investor. With the increase popularity in using self directed IRAs to make investments, such as real estate, an increasing number of individuals with retirement funds have been seeking tax and accounting expertise with respect to the IRS rules surrounding the use of retirement funds to make non-traditional investments, such as real estate including partnership tax matters and the reporting of the unrelated business taxable income tax. Accordingly, the IRA Financial Group has expanded its annual self-directed IRA real estate LLC consultation services to include federal tax filings matters and related services.

When making a non-traditional investments with retirement funds, such as real estate, we at the IRA Financial Group believe it is crucial that all our clients are equipped to satisfy all IRA tax filing requirements, “ stated Adam Bergman, a tax partner with the IRA Financial Group. “Using a self-directed IRA LLC to buy real estate can trigger certain IRA filing requirements, especially if leverage is used, and we want to make sure the all our clients are well equipped to handle all potential IRS filing requirements,” stated Mr. Bergman.

IRA Financial Group Expands Annual Compliance Services for Self-Directed IRA Real Estate Clients When it comes to making investments using a self directed IRA, the Internal Revenue Code does not describe what a self directed real estate IRA could invest in, only what it cannot invest in. Internal Revenue Code Sections 408 & 4975 prohibits 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. “We believe that our annual self-directed IRA LLC compliance service helps educate our clients on all the IRS prohibited transaction rules,” stated Jacky Ospina, a self-directed tax specialist with the IRA Financial Group.

Each self-directed IRA LLC client will have direct and unlimited access to our in-house tax and ERISA professionals and CPAs. Each client of the IRA Financial Group is assigned a tax professional and CPA 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 continual education materials regarding the IRS prohibited transaction rules and IRS federal tax filing matters”, 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 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 contact us at 800-472-0646.

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Apr 29

Buying and Holding Precious Metals with a Self Directed IRA

Thanks to significant advertising by precious metals dealers, it has become widely known that Gold, Silver and other precious metals (Platinum & Palladium) can be purchased with retirement account funds. By Self-Directing your IRA LLC  investments into precious metals, your profits are tax-deferred back into your retirement account. More importantly, if you have full checkbook control over your Self-Directed IRA LLC, the purchases can be made on the spot as fast as you can write a check. Precious metals are the original currency of early civilizations and therefore a store of value, literally for thousands of years.

The purchase of Bullion is a surprisingly safe investment. The transaction is fast and its characteristics make precious metals a perfect investmentPrecious Metals for the individual with full checkbook control of an IRA Financial Group IRA LLC. In fact, the use of a Self-Directed IRA LLC is one of the most tax efficient ways to finance your Gold/Silver purchase.

Only a handful of institutions are skilled in these specialized account structures and only one has been founded by and is exclusively operated by attorneys – IRA Financial Group. Simply put, we are the “gold standard” for Compliance, Leadership, Customer Service, and Technological Innovation. We carefully advise you on handling this type investment in a manner that places these assets closer to your emergency access while remaining solidly within the spirit and letter of the law.

What Type of Precious Metals and Coins are IRS Approved Investments?

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).

The 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. Regarding 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.

How do I hold Physical Gold in a Self-Directed IRA LLC?

Internal Revenue Code Section 408(m) identifies what types of coins and precious metals are permitted to be purchased using a Self-Directed IRA.

Section 408(m) also states that bullion (IRS approved gold, silver, or palladium) must be held in the physical possession of a trustee described under subsection (a). The “physical possession” requirement seemingly only applies to bullion not approved coins.

A trustee is defined in Internal Revenue Code Section 408(a) as a bank (as defined in subsection (n)) or such other person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section.

Internal Revenue Code Section 408(n) defines a bank as any bank (as defined in section 581) or an insured credit union (within the meaning of paragraph (6) or (7) of section 101 of the Federal Credit Union Act).

Section 541 defines a bank as a bank or trust company incorporated and doing business under the laws of the United States (including laws relating to the District of Columbia) or of any State, a substantial part of the business of which consists of receiving deposits and making loans and discounts, or of exercising fiduciary powers similar to those permitted to national banks under authority of the Comptroller of the Currency, and which is subject by law to supervision and examination by State, Territorial, or Federal authority having supervision over banking institutions. Such term also means a domestic building and loan association. The Code seems to suggest that metals cannot be held in a foreign bank account since it would not satisfy the definition of a bank. The question then becomes what does “physical possession” mean.

IRC Section 408(m) clearly states that gold, silver, or palladium bullion must be held in the physical possession of a U.S. trustee, otherwise known as a U.S. bank or financial institution.

Thus, the question then becomes, if a an IRA holder holds precious metals in a safe deposit box at a U.S. bank in the name of the Self-Directed IRA LLC is that in the “physical possession” of a U.S. trustee or bank. Well the argument goes that the precious metals are certainly not in the physical possession of the IRA holder since they will physically be held in a safe deposit box of the bank. Although, an argument can be made that the safe deposit box is constructively in the control of the IRA holder, since he or she has the keys for the box. However, the Internal Revenue Code under Section 408 clearly states “physical possession” and not “constructive control”. From a legal standpoint, possession is not defined to represent control, meaning one can be in possession of an item but not in control or ownership of. Hence, many tax practitioners take the position that holding precious metals in a safe deposit box in the name of the Self-Directed IRA LLC would satisfy the “physical possession” requirement under Internal Revenue Code Section 408(m).

The IRS has not offered any clear guidance on this issue, but what is clear, unlike IRS approved coins, is that precious metals should not be stored in the home or possession of the IRA holder or any person that does not satisfy the definition of a trustee pursuant to the Internal Revenue Code.

How do I hold IRS Approved Coins with a Self-Directed IRA LLC?

Now that you have a clear idea of the types of coins that the IRS allows to be purchased using retirement funds, the next questions becomes how can the coins be held without violating IRS rules.

Unlike precious metals, the Internal Revenue Code and the legislative history does not include a requirement that IRS approved coins be held in the “physical possession of a U.S. trustee.” If so, the requirement would have been so stated in the tax code. Accordingly, it appears that IRS approved coins can be purchased by a Self-Directed IRA LLC and not be held at a depository or U.S. Bank. However, based on conversations between IRA Financial Group tax counsel and representatives of the IRS and Department of Labor, we suggest that our clients try to hold IRS approved coins at a bank safe deposit box, depository, or some sort of third-party vault in the name of the IRA LLC.  The reason for this is that it is another level of separation between the IRA holder – a disqualified person – and the IRA LLC assets (the coins), which the IRS plan asset rules will attribute to the IRA even though the coins will be owned by the LLC. Irrespective of the fact that it appears that IRS approved coins are not required to be held in the “physical possession of a U.S. trustee”, holding the coins in the physical possession of a disqualified person puts the onus on the IRS holder, as the disqualified person, to prove that no self-dealing or conflict of interest event occurred in the case of an IRS inquiry.  For IRA Financial Group clients that wish to hold IRS approved coins in their physical possession, our retirement tax professionals suggest that an affidavit be drafted stating that the IRS approved coins are being held solely for the benefit of the IRA and not for any personal or other benefit.  We also suggest that the affidavit be signed and notarized.

In summary, the “physical possession” threshold seems to only apply to IRS approved precious metals under Internal Revenue Code Section 408(m), although the tax code does not state anywhere that the coins could be held in the possession of a disqualified person.  For this reason, the retirement tax professionals at the IRA Financial Group suggest that individuals seeking to hold IRS approved coins hold the coins at a bank safe deposit box in the name of the LLC or some sort of vault or depository. However, holding the coins personally does not appear to violate Internal Revenue Code Section 408.  That being said, for all individuals wishing to hold IRS approved coins personally, the retirement tax professionals at the IRA Financial Group suggest having some sort of affidavit stating that the coins will not be held for any personal benefit and will, thus, not violate any of the Internal Revenue Code Section 4975 self-dealing or prohibited transaction rules.

Gold & Silver Purchases

Financial professionals across the globe all agree that asset diversification is the key to success. To reduce the risks of investing, they suggest the purchase of precious metals to diversify investments among different securities or asset classes.

Now you can hold precious metals in your individual retirement account.  With a self-directed IRA LLC or Solo 401(k) Plan from IRA Financial Group, you can invest in all types of precious metals, including gold, silver, platinum and palladium.

Advantages

1. Timing & Pricing. In today’s volatile and complex market place, timing and pricing is everything. With a Self-Directed IRA LLC, buy and sell orders can be done instantly, leaving no down time for big price swings in between trades.

2. Your Money Grows Tax-Free. By buying Gold in an IRA Financial Group Self-Directed IRA LLC, you can avoid all taxes until the money invested is withdrawn. Equally important, having access in time of crisis or national emergency is in the forefront of many people’s minds these days; we will help you ease that concern with a sound strategy that’s consistent with IRS requirements.

3. The Flexibility to Buy Time Sensitive Investments. IRA Financial Group’s Self-Directed IRA LLC’s allow you to carry a checkbook that is tied to the account. This gives you, the investor, an incredible freedom to buy precious metals at a moment’s notice.

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

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Apr 27

The Roth Real Estate IRA LLC

A Real Estate IRA LLC is generally also referred to as a Self Directed IRA LLC or a Checkbook Control LLC. In the case of a Real Estate 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.

Real Estate is an IRS Approved Investment

The IRS has always permitted real estate to be held inside IRA retirement accounts. Investments with a Real Estate IRA are fully permissible under the Employee Retirement Income Security Act of 1974 (ERISA). IRS rules permit you to engage in almost any type of real estate investment, aside generally from any investment involving a disqualified person.

A Real Estate IRA LLC Offers Checkbook Control

Having checkbook control over your IRA funds will permit you to make real estate investments with your IRA funds. You will no longer be relegated to investing in traditional securities and mutual funds, instead you will have the ability to diversify your investment portfolio and invest in real estate.

A Real Estate IRA Offers Growth Potential

Real Estate IRA LLCA Roth Real Estate IRA can offer the opportunity to greatly accelerate the growth in your retirement portfolio. With a Real Estate IRA you can take advantage of the high growth real estate investment sector while benefiting from the tax free IRA benefits.

As an alternative to the stock market, income-producing real estate properties can provide consistent income as well as long-term gains through appreciation.  There are no limitations on the types of properties that can be held by a Real Estate IRA. A few investment possibilities include residential, commercial, industrial buildings, raw land, foreign real estate and farm land. You can also invest in real estate related notes, liens & options.

Real Estate IRA in Today’s Market

The residential and commercial real estate market has taken a dramatic downturn generally due to the sub-prime mortgage meltdown. While it’s a bad real estate market for current owners and landlords, it’s a great investment market for real estate investors with capital. The Real Estate IRA is perfect for any person looking to diversify their retirement funds by investing in the high growth real estate market. With a Real Estate IRA, you can act quickly on a great real estate investment opportunity. When you find a real estate 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.

Use Leverage with your Real Estate IRA

The Real Estate IRA can then be utilized when making a real estate investment all in cash, or may be used when using a non-recourse loan to fund an investment. A non-recourse loan is the only type of loan allowed for a Self Directed IRA. A nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, but for which the borrower is not personally liable.

A Real Estate IRA Eliminates or Reduces Custodial Costs

With a Real Estate IRA, you can save a lot of money on custodian fees. When setting up a Real Estate IRA, IRA Financial Group utilizes a passive custodian that charges a very low annual fee and provides excellent customer service.

Setting-Up a Real Estate IRA is Easy

IRA Financial Group makes setting up your Real Estate IRA easy, effortless, and inexpensive.

How it Works

We take care of everything. The whole process can be handled by phone, email, fax, or mail. You can expect the process to set up a Real Estate IRA to take about 15 days. If your current custodian is expedient in releasing your funds, it will take even less time. Additionally, you will have access to our IRA experts for free consultation anytime.  Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.

The Real Estate IRA Process

STEP 1: A Real Estate IRA account is established with a passive custodian in preparation of funds being transferred from one or more existing IRA accounts.

STEP 2: A Limited Liability Company (LLC) is formed with the IRA account holder designated as Manager.

STEP 3: The Manager directs all, or a portion, of the retirement funds held by the Passive Custodian into the LLC bank account.

For more information, please contact an IRA Expert @ 800.472.0646!

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Apr 24

RMDs and Real Estate in an IRA

Here’s an article from OregonLive.com that speaks about RMDs and Real Estate in Self-Directed IRAs:

Recently I wrote two columns about the Social Security tax torpedo. It’s a wrinkle in the tax code that surprises some middle-income seniors with a higher tax bill when they take their first Required Minimum Distribution from their IRA.

Those columns prompted this question from John: If you took your regular IRA and made it a self-directed IRA and invested that into real estate, how could the government make you take out an RMD – a required minimum distribution – when you turned 70-and-a-half? I don’t know how they could do that, make you sell part of that real estate and take it out?

My answer: Sure the government can. Holding real estate inside an IRA can cause all sorts of problems if one an investor is not careful, said Ed Slott, who publishes a report on IRAs.

First, a self-directed IRA is still a traditional IRA, subject to RMDs, Slott said. If the owner doesn’t take RMDs, he or she faces a 50 percent penalty on the amount not withdrawn.

“In addition, if all of the IRA funds are invested in real estate (or some other illiquid asset), and there is no other cash available in any other IRA to take the RMDs, … a piece of the real estate would have to be distributed to satisfy the RMD,” Slott said via e-mail. “That also means having at least annual valuations that the IRA has to pay for.”

IRA also owners also face new IRS reporting requirements for hard-to-value assets, mainly to make sure they’re not undervalued, he said. These disclosures are optional this year but will be required in 2015. Finally, if the IRA owner uses the property personally, the IRS could rule it a prohibited transaction.

“This is the worst of all IRA penalties,” Slott said, “since the entire IRA becomes taxable as if you withdrew every cent.”

A better option for real estate exposure: Invest your IRA money in a publicly traded Real Estate Investment Trust, or REIT.

Or just suck it up. Take your RMDs and pay the requisite taxes. The government let you defer taxes on earnings for many years. Now, it wants its money. And there’s not much you can do about it.

If you have any questions, or would like more information about Self Directed IRAs, please contact the IRA Financial Group @ 800.472.0646!

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Apr 23

Guard Against Fraud with Your Self Directed IRA

Fraud Alert Detector

Guard Against Fraud With Your Self-Directed IRA and Solo 401(k) Plan

The IRA Financial Group encourages each investor to review the following questions when considering an investment. Because it is not the responsibility of IRA Financial Group to provide investment analysis or recommendations or to perform due diligence concerning your investment decisions, the questions have been designed to help you in your efforts to evaluate the soundness, prudence and merit of your investments.

Please note that this is not a comprehensive list of questions but simply a starting point. The answers to these questions are not a substitute for your own due diligence. We also strongly encourage investors to make use of legal, tax and financial advisors to support these efforts.

Always take the time you need to understand and evaluate a potential investment. Make sure you understand the investment you will be making and thoroughly understand how the promoter will be able to generate the returns being promised. Also, make sure the promoter of the investment has the necessary qualifications or licenses, if applicable, to offer the investment. Be cautious if a sponsor or advisor uses the affiliation as the reason to make the investment, rather than relying on the underlying merits of the investment or trust in the sales person.

Start

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Apr 21

Types of Self-Directed IRAs

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.

Types of Self-Directed IRAs2. 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, IRA Financial Group would serve as the administrator and custodian of the self-directed IRA administrator and custodian. Unlike a typical financial institution, IRA Financial Group does not sell investment products or investment advice. 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. Title to the assets being purchased will be held in the name of IRA Financial Group for the benefit (FBO) the IRA.

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, IRA Financial Group will be involved in executing the transaction on behalf of the IRA. The custodian controlled self-directed IRA is popular when the IRA will be making a one-time investment, such as a private equity, hedge fund, venture capital fund, or land purchase. However, for investments that are on-going, such as real estate, tax liens, hard money loans, and even precious metals, the self-directed IRA LLC solution has become the popular choice for investors.

3. “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. The self-directed IRA LLC structure was then confirmed by Field Service Advice Memorandum (FSA) 200128011 and most recently by the Tax Court in T.L. Ellis, TC Memo. 2013-245, Dec. 59,674(M) (“TC Memo 2013-245”).

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 retirement tax specialists have help establish over 8000 self-directed IRA LLC structures and its experience and knowledge in this area is unmatched.  For more information, please contact us @ 800.472.0646 or visit our website today!

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Apr 20

New Podcast – 3 Most Common Mistakes When Using a Self-Directed IRA to Buy Real Estate

IRA Financial Group’s Adam Bergman discusses the most common mistakes when using a self-directed IRA to buy real estate.

IRAFG Logo SmallClick Here to Listen

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Apr 17

Common Roth IRA Mistakes to Avoid

If you have a Roth IRA, or are thinking about opening one up, you should be aware of mistakes that can be made that could cost you thousands of dollars.  Here are a few of the more common mistakes people make.  Roth IRAs are great savings vehicles, but be wary of the rules.

The first consideration is your annual income.  Mistakes can be made if you earn too little or too much during the year.  First off, you cannot contribute more than your earned income during a given year.  Earned income is typically your salary, wages, bonuses tips as well as self-employment money.  Earnings received from such things as capital gains and dividends DO NOT count toward your Roth IRA contribution limit.  For 2015, the maximum allowable contribution is $5,500 ($6,500 if you are over age 50) or your earned income on the year, whichever is less.  Secondly, you cannot directly contribute to a Roth IRA if you earn too much money.  If you are married filing jointly and earn more than $193,000 or if you are single and earn more than $131,000, you may not contribute to a Roth IRA.  Married couples can fully fund a Roth if their combined income is less than $183,000 and singles who earn less than $116,000.  The amount available to contribute decreases as you near the cap.

Excess contributions to a Roth IRA will result in a 6% penalty each year until the mistake is rectified.  Avoid this mistake by either removing the money before filing your taxes or carryover the contribution to the next year.  Note that if you have more than one IRA (whether Roth or Traditional) the maximum contribution is for all IRAs, not per IRA.

Thinking about rolling over a traditional IRA to a Roth IRA?  Be warned that only one rollover is allowed every 365 days (no matter the type of IRAs involved).  This is a new rule for 2015.  Previously, the rule was once per year.  Theoretically, you could’ve performed a rollover on December 31 and again on January 1 of the next year.  In 2015, that could result in the loss of your IRA.

Common Roth IRA Mistakes to AvoidAnother factor to consider when performing an IRA rollover is the 60-day rule.  If your intention is rolling the money from one IRA to another, you have 60 days to perform this action if you take hold of the funds yourself.  If you miss this deadline, the money withdrawn is treated as a distribution and taxes will be due and a 10% early withdrawal penalty is assessed if you are under age 59 1/2.  To avoid this mistake, you should perform a trustee-to-trustee transfer where the money goes directly to the new financial institution of your IRA.  This way, you never take possession of the funds and won’t have to worry about the 60-day rule.

Roth IRAs are not subject to Required Minimum Distribution rules, UNLESS you inherit one from a non-spouse.  If you are a beneficiary of a parent’s Roth IRA, for example, you must follow RMD rules or be subject to a 50% penalty on the amount not taken.

Lastly, like all other retirement plans, you should re-balance your Roth IRA account at least annually.  The fluctuations in the market may cause your asset allocations to change leaving you more (or less) open to risk than you intended.  Re-balancing will put you at a more comfortable risk for your financial goals.

These are just a few of the countless mistakes that can occur with a Roth IRA.  It’s best to deal with a financial advisor or retirement expert to help better understand these rules.  If you have any questions about the Roth IRA, please contact the IRA Financial Group @ 800.472.0646.

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Apr 16

The Checkbook IRA Advantage

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.

In 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 an IRA Expert @ 800.472.0646 today!

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Apr 15

Why Choose IRA Financial Group for Your Self Directed IRA?

Expertise: 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. With our work experience at some of the largest law firms in the country, our tax professionals’ retirement plan and tax knowledge in this area is unmatched.

Leadership: IRA Financial Group is the market’s leading* Self-Directed IRA provider. We have helped over 8,000 clients establish IRS compliant Self-Directed IRA and invest over $2.6 billion in alternative assets, such as real estate.

Prestige: IRA Financial Group and its founders have been featured on CBS News, PBS Nightly Business Report, and in over 100 major print publications, including Forbes, Fox Business, the Wall Street Journal, CNN Money, USA Today, The San Francisco Chronicle, Dallas Morning News, Law.com, American Lawyer, the Houston Chronicle, the Chicago Tribune, and many more.

Value: With IRA Financial Group, you no longer have to incur excessive fees to establish and administer an IRS compliant Self-Directed IRA LLC. We are committed to offering our clients customized professional services at a fair and reasonable price and we are able to deliver this by harmoniously blending professionalism, quality and efficiency.

Our Promise: If for any reason you elect to not go through with the Self-Directed IRA LLC structure, you will not be responsible for paying our one-time set-up fee – it’s that simple – no questions asked! Cancel anytime – we understand that in some cases plans change or an anticipated transaction does not materialize and we certainly don’t believe it would be fair to our clients to impose a fee for a structure that won’t be needed.

Access: When choosing the IRA Financial Group, you will have direct and unlimited access to our in-house tax and ERISA professionals, as well as our in-house CPAs. Unlike our competitors, we don’t limit your access to our tax professionals; in fact, you will likely have the opportunity to talk with one of them before you even get started. In addition, each client of the IRA Financial Group is assigned a retirement tax professional to assist in establishing an IRS compliant Self-Directed IRA LLC.

Security: IRS rules require your retirement funds to be transferred from custodian to custodian. We at the IRA Financial Group never have access to your retirement funds in any way. You, as the manager of the IRA LLC, will be the only party with direct access to your retirement funds – true “Checkbook Control”.

Integrity: We are guided by the rules of ethical conduct in all that we do. Our relationships with clients are built on trust, respect, and confidentiality.

Results: We are committed to our clients’ satisfaction and strive to meet and exceed our clients’ expectations.

Guarantee: The IRA Financial Group is fully committed to offering IRS compliant self-directed retirement structures and accordingly offers a full IRS audit guarantee in connection with the validity of the Self-Directed IRA LLC. The IRA Financial Group stands by the legality of the Self-Directed IRA LLC and will fully defend its merits against any IRS audit.

We respect your time! You will never be pestered by a salesperson or receive unsolicited emails!

The mission of IRA Financial Group is to empower prospective clients with relevant information needed to make informed decisions on investment activities conforming to tax law and IRS rules.

We leave the ball in your court to decide if you wish to proceed with us. Of course, we would welcome the opportunity to work with you. If you decide to be our client, we will be here for you step-by-step to set up the right structure for you and to help to make sure you implement it correctly.

Once again, we will not send unsolicited follow-up communications from our tax experts – we just respect your privacy and time.

Get started today: Getting started is quick, easy, and inexpensive. We take a small deposit up front to cover LLC state filing fees, and our one-time set-up fee is only due once the structure has been established. In addition, our fee can be paid in full using your retirement funds.

Self Directed IRA LLC, Solo 401K, Business Acquisition Solution

IRA Financial Group will take care of setting up your entire IRS compliant Self-Directed IRA LLC. The whole process can be handled by phone, email, fax, or mail and typically takes between 7-21 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our tax and ERISA professionals are on-site greatly reducing the set-up time and cost.

To learn more about the IRA Financial Group or to set up a Self-Directed IRA, please contact us @ 800.472.0646 today!

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