Jan 11

IRA Financial Group’s Business Funding Services

The IRA Financial Group was founded by a group of top law firm tax and ERISA professionals who have worked at some of the largest law firms in the country, including White & Case LLP and Dewey & LeBoeuf LLP.

IRA Financial Group's Business Funding ServicesIn developing our Business Acquisition & Compliance Solution Structure (“BACSS”), our in-house retirement tax professionals have carefully examined and researched IRS and Department of Labor guidance to design a structure that is fully compliant with IRS and ERISA rules. Each client of the IRA Financial Group is assigned an individual retirement tax professional who will help customize a structure that satisfies his or her financial and retirement needs while ensuring the structure is developed in full compliance with IRS and ERISA rules and requirements. Our services include:

  • Establishment of “C” Corporation including Filing Fees;
  • Filing LLC Articles of Incorporation with the state;
  • Application for Corporation EIN;
  • Drafting all required initial corporate resolutions and minutes;
  • Drafting of customized Stock Purchase Agreement;
  • Drafting of customized Employee Stock Purchase Agreement;
  • Free consultation with in-house retirement tax professional on the BACSS structure;
  • Adoption of 401(k) Plan;
  • Basic Plan Document;
  • EGTRRA Amendment;
  • Summary Plan Description;
  • Trust Agreement;
  • Appointment of Trustee;
  • Beneficiary Designation;
  • Application for Plan trust EIN;
  • Assistance in the establishment of business and 401(k) Plan bank accounts;
  • Assistance with the transfer of funds to your new 401(k) Plan bank account;
  • Assistance in coordinating the completion of all IRS required information returns
  • Assistance in coordinating the acquisition of an independent business appraisal;
  • Free consultation with in-house retirement tax professional on the BACSS structure;
  • Tax support on the BACSS and the 401(K) Plan; and
  • Annual compliance review

We have developed a process that ensures speed and compliance, by using standardized procedures that work via phone, e-mail, fax, and mail. Your funds will typically be ready for investment into your new or existing business within 14-21 days.

Is there an annual fee?

In order to ensure the structure remains in compliance with IRS and ERISA rules and procedures, the IRA Financial Group suggests that each of its clients elect to use IRA Financial Group’s annual tax compliance services. Our low annual fee includes tax advice on the structure and the 401(k) Plan, as well as includes the delivery of new Plan documents in the case of a change in law. In addition, IRA Financial Group will work with you to coordinate the filing of any IRS information returns as well as the attainment of the annual business appraisal.

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

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May 18

How Long to Set Up a Self-Directed IRA LLC?

The IRA Financial Group will take care of setting up your entire Self Directed IRA LLC structure in a matter of days. Our in-house tax and ERISA professionals will work with you directly to customize a structure that satisfies your tax and investment goals.

How Long to Set Up a Self-Directed IRA LLC?The whole process can be handled by phone, email, fax, or mail. Our expert tax and ERISA professionals are on site greatly reducing the set-up time and cost. Our in-house retirement tax professionals will complete all the necessary IRA rollover or transfer paperwork and assist you in transferring your funds to the new passive custodian so that your funds will be available for investment in a matter of days. Typically it takes anywhere between 7 and 21 days for your funds to be transferred to your new “Checkbook Control” Self Directed IRA LLC. In most cases, we are able to complete the IRA LLC facilitation aspects of the transaction within a few days; however, the transfer of funds from one custodian to another can take some time depending on the financial institution and the type of assets being transferred. Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To get started or to learn more about the Self-Directed IRA LLC Structure, please contact one of our IRA Experts at 800-472-0646.

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Sep 20

Adam Bergman, IRA Financial Group Partner, Publishes Second Book on Self-Directed IRA

Newly published Self-Directed IRA in a Nutshell book will help explain the self-directed IRA structure and is available on Amazon.com

Adam Bergman, a partner with the IRA Financial Group, LLC, the markets leading provider of Self-Directed IRA LLC and Solo 401(k) plans, announces the release of his second book on the self-directed IRA structure, titled Self-Directed IRA in a Nutshell. The new book is available on Amazon.com and at most popular book sellers. This is Mr. Bergman sixth book in the area of retirement plans and taxation. “I am really excited to release my new book – Self-Directed IRA in a Nutshell, which I believe will offer an easy and simple introduction to the increasingly popular self-directed IRA retirement solution,” stated, Adam Bergman, author of the Self-Directed IRA in a Nutshell.

Mr. Bergman is a recognized expert on IRAs and 401(k) Plans and is the founder of the BergmanIRAReport.com and the Bergman401KReport.com. Mr. Bergman is the author of six previous books on the taxation of retirement accounts: Going Solo, The Checkbook IRA, Turning Retirement Funds into Start-Up Dreams, In God We Trust—In Roth We Prosper, and Solo 401(k) Plan in a Nutshell, which are all available on Amazon.com and Barnes & Nobles. Mr. Bergman is a frequent contributor to Forbes and has advised over 12,000 clients on the self-directed IRA LLC and Solo 401(k) Plan solutions.

Adam Bergman, IRA Financial Group Partner, Publishes Second Book on Self-Directed IRAAccording to Mr. Bergman, “I’ve written this book for people who want to learn more about the basics of what a self-directed IRA is and how it works without having to read a five hundred-page book. In 2015, I published an in depth and detailed 466 page book on the self-directed IRA structure titled, The Checkbook IRA, Why You Want It, Why You Need It, A Private Conversation With a Top Retirement Tax Attorney, that I am very proud of and which has hopefully helped many retirement investors learn more about the Self-Directed IRA option. However, in addition to have received some really great feedback from many people and clients who bought the book, I did get some comments requesting that I write another book on the self-directed IRA structure that was a bit more introductory and less comprehensive. So, I have decided to heed their advice and hope this book helps introduce many of the important concepts involved in establishing and using a self-directed IRA to make traditional as well as alternative asset investments, such as real estate with their retirement funds.”

Mr. Bergman has been quoted in a number of major publications on the area of self-directed retirement plans. Mr. Bergman has been interviewed on CBS News and has been quoted in Businessweek, CNN Money, Forbes, Dallas Morning News, Daily Business Review, Law.com, San Francisco Chronicle, U.S. Tax News, the Miami Herald, Bloomberg, Arizona Republic, San Antonio Express, Findlaw, Smart Money, USA Today, Houston Chronicle, Morningstar, and American Lawyer on the area of retirement tax planning.

Prior to joining the IRA Financial Group, LLC, Mr. Bergman worked as a tax and ERISA attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent corporate law firms in the world. Throughout his career, Mr. Bergman has advised thousands of clients on a wide range of tax and ERISA matters involving limited liability companies and retirement plans. Mr. Bergman received his B.A. (with distinction) from McGill University and his law degree (cum laude) from Syracuse University College of Law. Mr. Bergman also received his Masters of Taxation (LL.M.) from New York University School of Law.

Mr. Bergman is recognized as a leading retirement tax-planning expert and has lectured attorneys on the legal and tax aspects of Self-Directed IRA LLC and Solo 401(k) Plans. Mr. Bergman has also been retained by several leading IRA custodians, including Entrust, to offer expertise on the Self-Directed IRA structure. Mr. Bergman is a member of the Tax Division of the American Bar Association and New York State Bar Association.

IRA Financial Group is the market’s leading provider of self-directed IRA 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.

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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Jun 13

Everything You Ever Needed to Know About Self Directed IRAs

A Self-Directed IRA LLC is a type of IRA that allows the IRA holder (you) to gain control over your retirement funds so you have the ability to self-direct the type investments that you want to make using your retirement funds. With a traditional Self-Directed IRA, you as the IRA holder must direct the IRA custodian to make the investment you wish to make using your retirement funds, which often triggers high custodian fees and transaction delays. Whereas, with a Self-Directed IRA LLC with Checkbook Control you as the IRA LLC manager will have the ability to make traditional investments (stocks, mutual funds) as well as non-traditional investments (real estate, precious metals, etc) tax-free and without custodian consent.

The Self-Directed IRA LLC “Checkbook Control” Structure is IRS and tax court approved. The idea of using an entity owned by an IRA to make investments 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.

Self-Directed IRA LLCUnlike a conventional Self-Directed IRA which requires custodian consent and requires high custodian fees, a Self-Directed IRA LLC with Checkbook Control will allow you to buy real estate or make other investments by simply writing a check.  With a Self-Directed IRA LLC, a special purpose limited liability company (“LLC”) is established that is owned by the IRA (care of the IRA custodian) and managed by you or any third-party. As manager of the IRA LLC, the IRA holder (you) will have total control over the IRA assets to make the investments you want and understand – not just investments forced upon you by Wall Street.

With IRA Financial Group’s Self-Directed IRA LLC, you will have total control to make any approved investment, including a real estate purchase, pay for improvements, and then sell the property without ever talking to the IRA custodian.  Since all your IRA funds will be held at a local bank in the name of the Self-Directed IRA LLC, all you would need to do to engage in a real estate transaction or other investment is write a check straight from the IRA LLC account or simply wire the funds from the IRA LLC bank account.  No longer would you need to ask the IRA custodian for permission or have the IRA custodian sign the real estate transaction documents.  Instead, with a Checkbook Control IRA, as manager of the IRA LLC, you will be able to execute the IRA investment by simply writing a check.

With a Self-Directed IRA LLC you will never have to seek the consent of a custodian to make an investment or be subject to excessive custodian account fees based on account value and per transaction.

By having a Self-Directed IRA LLC, you will gain checkbook control over your IRA funds so you can make real estate and other investments tax-free and without custodian consent.

The following are a number of the benefits of using a Self-Directed IRA LLC:

“Checkbook Control ”: With a Self-Directed IRA LLC with Checkbook Control, as the IRA LLC manager (the IRA care of the custodian will be the owner/member of the LLC), you will no longer have to get each investment approved by the custodian of your account. Instead, as manager of the Self-Directed IRA LLC, all decisions are truly yours. To make an investment, simply right a check and use the funds straight from your Self-Directed IRA LLC bank account.

Invest in Real Estate & much more Tax-Free: With a Self-Directed IRA LLC with checkbook control, you will be able to invest in almost any type of investment opportunity that you discover, including: real estate; your only limit is your imagination. The income and gains from these investments will flow back into your IRA tax-free.

Reduce Custodian Fees: With a Self-Directed IRA LLC structure, you will be in a position to save a significant amount of money on custodian fees. With a Self-Directed IRA LLC you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, with a Self-Directed IRA LLC, you will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your IRA funds, as manager of the Self-Directed LLC, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA LLC allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Tax Deferral: With the Self-Directed IRA LLC structure, all income and gains from IRA investments will generally flow back to your Self-Directed IRA LLC tax-free. Because an LLC is treated as a pass-through entity for federal income tax purposes and the IRA, as the member of the LLC, is a tax-exempt party pursuant to Internal Revenue Code Section 408, all income and gains of the LLC will generally flow-through to the IRA tax-free!

The Self-Directed IRA LLC, allows the IRA holder to:

  • Better protect their hard-earned retirement assets from a falling stock market or against the risk of U.S. inflation
  • Use the same Self-Directed IRA LLC to purchase domestic and foreign real estate, private mortgages, gold and stocks, bonds and mutual funds inside the same plan and generate profits tax-free
  • Purchase real estate foreclosures and tax liens on the spot, or make personal loans by simply writing a check and generate profits tax-free
  • Buy your retirement home or vacation property now at today’s prices, rent it out, and then move in at the age of 59 and 1/2!
  • Diversify your retirement portfolio and invest in almost any type of investment tax-free
  • Take control of your retirement funds and hold them at a local bank or credit union
  • Make a real estate or other investment by simply writing a check – it is that easy
  • Generate tax-free income and shield your retirement assets from creditors or bankruptcy!

The IRA Financial Group will take care of the entire setup of your Self-Directed IRA LLC “Checkbook Control” structure. 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 IRA experts and tax and ERISA professionals are on-site greatly reducing the setup time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Self-Directed IRA LLC “Checkbook Control” structure. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To learn more about the Self-Directed IRA LLC structure, contact one of our IRA Professionals at 800-IRA-0646 today!

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Jun 10

Adam Bergman – IRA Financial Group Partner – Publishes Book on the Power of the Roth IRA Now Available on Amazon

New Roth IRA book is aimed at helping millennials and Generation Xers save for retirement

Adam Bergman, tax attorney and IRA Financial Group partner announces the release of his fourth book on retirement accounts titled: In God We Trust – In Roth We Prosper. How contributing just a few dollars a day to a Roth IRA can help you live large.

Written by author Adam Bergman, Esq., an experienced tax attorney who specializes in IRAs and 401(k)s, this must-read guide lays out everything one needs to know about how retirement accounts work. Whether it’s figuring out which one is the best one based on ones personal income circumstances, what to do to get started, or how much money to put away in a retirement account each year.

From a twenty-two-year-old just starting out in the job market to those in their late fifties who are already eyeing the end of their careers, anyone who desires to make sound investment decisions for their future will find great advice and solid answers to their most pressing questions with the Roth IRA book. “I have written this book to help millennials and Generation Xers understand the importance of starting to save for retirement at a young age and how just saving a few dollars in a self-directed Roth IRA can lead to hundreds of thousands of dollars of tax-free funds at retirement,” stated Adam Bergman.

According to Mr. Bergman, saving for retirement doesn’t have to be scary—and it’s certainly never boring! The book’s aim is to showcase the power of the Roth IRA and how easy it is to start saving for retirement. The book hopes to show young people that starting young and being consistent is the key to retirement saving. In addition, though examples and case studies, the book will show that one doesn’t need to be a high earner to consider saving through a Roth IRA. Even one dollar a day will make a difference.

Adam Bergman – IRA Financial Group Partner – Publishes Book on the Power of the Roth IRA Now Available on AmazonAdam Bergman is a partner with the IRA Financial Group, LLC, the markets leading provider of Self-Directed IRA LLC and Solo 401(k) plans. Mr. Bergman is also the President of the IRA Financial Trust Company, a self-directed IRA custodian. In addition, Mr. Bergman is a recognized expert on IRAs and 401(k) Plans and is the founder of the BergmanIRAReport.com and the Bergman401KReport.com. Mr. Bergman is the author of the book titled, “Going Solo: America’s Best Kept Retirement Secret For the Self-Employed,” available on Amazon, and is a frequent contributor to Forbes. Mr. Bergman has advised over 10,000 clients on the self-directed IRA LLC and Solo 401(k) Plan solutions.

In addition to the Roth IRA book, Mr. Bergman has written three other books on the topic of self-directed retirement plans, including “The Checkbook IRA”, “Going Solo,” and Turning Retirement Funds into Start-Up Dreams.

Prior to joining the IRA Financial Group, LLC, Mr. Bergman worked as a tax and ERISA attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent corporate law firms in the world. Throughout his career, Mr. Bergman has advised thousands of clients on a wide range of tax and ERISA matters involving limited liability companies and retirement plans. Mr. Bergman received his B.A. (with distinction) from McGill University and his law degree (cum laude) from Syracuse University College of Law. Mr. Bergman also received his Masters of Taxation (LL.M.) from New York University School of Law.

IRA Financial Group is the market’s leading provider of self-directed retirement 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.

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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May 26

The Difference Between ROBS and Our Business Financing Solution

The IRS has coined a structure that has been designed as a means for prospective business owners to access accumulated tax-deferred retirement funds in order to cover new business start-up costs as Rollovers as Business Startups, or ROBS. As stated in the IRS’s October 1, 2008 Memorandum and repeatedly affirmed by the IRS, the ROBS structure is legal but has been poorly implemented by a number of the promoters who have been actively marketing the structure. In other words, the IRS has concluded that the ROBS transaction is perfectly legal it has just not been implemented properly from an IRS and ERISA compliance standpoint. In contrast, the IRA Financial Group’s in-house retirement tax professionals have spent the last several years reviewing IRS materials and guidance in order to develop the Business Acquisition & Compliance Solution Structure (“BACSS”), an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax free!

The Difference Between ROBS and Our Business Financing SolutionWhile BACSS involves many of the same features of the ROBS transaction, the core distinction is that BACSS has been carefully developed by retirement tax professionals to include all the necessary elements so that the structure is fully compliant with IRS and ERISA rules and procedures. While our competitors were promoting the ROBS structure, which in many cases failed from a compliance standpoint, the IRA Financial Group’s in-house retirement tax professionals spent the last two years reviewing IRS materials in order to develop an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax free!

The IRA Financial Group’s in-house retirement tax professionals will work closely with you to assure that all IRS and ERISA compliance rules and procedures are carefully followed to ensure the legality of the structure.

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

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Apr 10

Can You Use a Self-Directed IRA to Take Advantage of the ROBS Structure?

No, you cannot use a Self-Directed IRA to take advantage of the Rollover Business Startup Solution (ROBS).  ERISA Section 408(e) provides that ERISA Section 406 shall not apply to the purchase by the Plan of qualifying employer securities (as defined in ERISA Section 407(d)(5)), provided that: (1) the acquisition or sale is for adequate consideration; (2) no commission is charged with respect to the acquisition or sale; and (3) the plan is an eligible individual account plan (as defined in ERISA Section 407(d)(3)). ERISA Section 407(d)(3) excludes IRAs from the definition of “eligible individual account plans.” A 401(k) plan fits in to this definition but not an IRA.

Can You Use a Self-Directed IRA to Take Advantage of the ROBS Structure?

For questions and more information, please contact us @ 800.472.0646 today.

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Mar 17

The Advantages of Using the Business Acquisition & Compliance Solution Structure (BACSS)

There are many advantages of using IRA Financial Group’s BACSS (also known as the Rollover Business Start-up or ROBS) to fund your business!

Tax Advantages: With the Business Acquisition & Compliance Solution Structure (BACSS) you have the ability to use your retirement funds to acquire a new business or grow an existing business tax-free!

Start or Grow a Business Tax-Free: With BACSS, you can access your retirement funds to start or grow a business tax free and without penalty!

Access Funds without Penalties: Accessing your retirement funds can prove expensive if not structured properly. Distributions before retirement age can cost you up to 45% in taxes and penalties. With BACSS, you can access your retirement funds to start or grow a business tax-free and without penalty!

Acquire or Build a Business with No Debt: With BACSS, you can start or grow a business without ever borrowing a penny or touching the home equity you worked so hard to build.

Control your Future: With BACSS, you will be in control of your retirement funds. BACSS is designed to make you the trustee of the plan giving you “Checkbook Control” over your retirement funds. As trustee of the plan you will have the ability to invest your funds to acquire or grow a business tax-free and without penalty!

Compliance with IRS and ERISA Rules: BACSS was designed as an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax-free! The IRA Financial Group’s in-house retirement tax professionals spent the last two years carefully studying IRS guidance in order to design an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax-free! Unlike our competitors who have been offering this type of structure for many years, prior to receiving guidance from the IRS and with a significant portion of their activity having been found to be non-compliant, the IRA Financial Group has patiently waited for clear IRS guidance before offering a structure that would be fully compliant with IRS and ERISA rules and procedures. Because the IRS has stressed the importance of compliance when using retirement funds to purchase a business, it is crucial to work with a company that is operated by a team of in-house tax and ERISA professionals who have worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP to ensure a fully compliant structure.

Speed: We have developed a process that ensures speed and compliance, by using standardized procedures that work via phone, e-mail, fax, and mail. Your funds will be ready for investment into your new or existing business within 14-21 days.

Value: With the IRA Financial Group, you will be working directly with our in-house tax and ERISA professionals to design an IRS and ERISA compliant structure that will allow you to use your retirement funds to acquire or grow a business tax-free at a fair and reasonable price.

Use your retirement funds to purchase a new business or franchise tax-free and without penalty!

It’s 100% IRS compliant.

Call us today at 800-472-0646 to learn more about how you can use your retirement funds to start a new business or grow an existing business tax-free, in full IRS compliance, and without penalties!

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Jan 15

Using Your Self Directed Roth IRA to Invest in Real Estate

It's Time To Let 401(k) Holders Invest Like the Pros Most people mistakenly believe that their Roth IRA must be invested in bank CDs, the stock market, or mutual funds. Few Investors realize that the IRS has always permitted real estate to be held inside IRA retirement accounts. Investments in real estate with a Self-Directed Roth IRA LLC 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.

In addition, the IRS states the following on their website: “…..IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option.”

Advantages of Using a Self-Directed Roth IRA LLC to Purchase Real Estate

Income or gains generated by a Roth IRA generate tax-free profits. Using a Self-Directed Roth IRA LLC to purchase real estate allows Using a Self Directed Roth IRA LLC To Purchase Real Estatethe Roth IRA to earn tax-free income/gains and never pay taxes on any future date, rather than in the year the investment produces income.

With a Self-Directed IRA Roth LLC, you can invest tax-free and not have to pay taxes ever! All the income or gains from your real estate deals flow though to your Roth IRA tax-free!

Types of Real Estate Investments

Below is a partial list of domestic and foreign real estate-related investments that you can make with a Self-Directed Roth IRA LLC:

  • Raw land
  • Residential homes
  • Commercial property
  • Apartments
  • Duplexes
  • Condos/townhomes
  • Mobile homes
  • Real estate notes
  • Real estate purchase options
  • Tax liens certificates
  • Tax deeds
  • Farm land
  • Any domestic or foreign real property

Investing in Real Estate with a Self-Directed Roth IRA LLC is Quick & Easy!

Purchasing real estate with a Self-Directed Roth IRA LLC is essentially the same as purchasing real estate personally.

  • Set-up a Self-Directed Roth IRA LLC with the IRA Financial Group
  • Identify the investment property
  • Purchase the investment property with the Self-Directed Roth IRA LLC. As manager of the Self-Directed Roth IRA LLC, you will not be required to seek the consent of the custodian to make a real estate investment providing you with “checkbook control” over your Roth IRA funds.
  • Title to the investment property and all transaction documents should be in the name of the Roth IRA LLC. Documents pertaining to the property investment must be signed by the LLC manager (you).
  • All expenses paid from the investment property go through the Self-Directed Roth IRA LLC. Likewise, all rental income checks must be deposited directly in to the Self-Directed Roth IRA LLC bank account. No Roth IRA related investment checks should be deposited into your personal accounts and no Roth IRA funds should be deposited into your personal account.
  • All income or gains from the investment flow through to the Roth IRA tax-free!

Tax Advantages of Using a Self-Directed Roth IRA LLC!

Using a Self-Directed Roth IRA LLC to make real estate investments presents a number of exciting tax planning opportunities.

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

Structuring the Purchase of Real Estate with a Self-Directed Roth IRA LLC

When using a Self-Directed Roth IRA LLC to make a real estate investment there are a number of ways you can structure the transaction:

1. Use your Self-Directed Roth IRA LLC funds to make 100% of the investment

If you have enough funds in your Self-Directed Roth IRA LLC to cover the entire real estate purchase, including closing costs, taxes, fees, insurance, you may make the purchase outright using your Self-Directed Roth IRA LLC. All ongoing expenses relating to the real estate investment must be paid out of your Self-Directed Roth IRA LLC bank account. In addition, all income or gains relating to your real estate investment must be returned to your Self-Directed Roth IRA LLC bank account.

2. Partner with Family, Friends, Colleagues

If you don’t have sufficient funds in your Self-Directed Roth IRA LLC to make a real estate purchase outright, your Self-Directed Roth IRA LLC can purchase an interest in the property along with a family member (non-disqualified person – any family member other than a parent, child, spouse, daughter-in-law, son-in–law), friend, or colleague. The investment would not be made into an entity owned by the IRA owner, but instead would be invested directly into the property.

For example, your Self-Directed Roth IRA LLC could partner with a family member (non disqualified person – any family member other than a parent, child, spouse, daughter-in-law, son-in–law), friend, or colleague to purchase a piece of property for $150,000. Your Self-Directed Roth IRA LLC could purchase an interest in the property (i.e. 50% for $75,000) and your family member, friend, or colleague could purchase the remaining interest (i.e. 50% for $75,000).

All income or gain from the property would be allocated to the parties in relation to their percentage of ownership in the property. Likewise, all property expenses must be paid in relation to the parties’ percentage of ownership in the property. Based on the above example, for a $2,000 property tax bill, the Self-Directed Roth IRA LLC would be responsible for 50% of the bill ($1000) and the family member, friend, or colleague would be responsible for the remaining $1000 (50%).

Isn’t Partnering with a family member in a Real Estate Transaction a Prohibited Transaction?

Likely no if it the transaction is structured correctly. Investing in an investment entity with a family member and investing in an investment property directly are two different transaction structures that impact whether the transaction will be prohibited under Code Section 4975. The different tax treatment is based on who currently owns the investment. Using a Self-Directed Roth IRA LLC to invest in an entity that is owned by a family member who is a disqualified person will likely be treated as a prohibited transaction. However, partnering with a family member that is a disqualified person directly into an investment property would likely not be a prohibited transaction. Note: If you, a family member, or other disqualified person already owns a property, then investing in that property with your Self-Directed Roth IRA LLC would be prohibited.

3. Borrow Money for your Self-Directed Roth IRA LLC

You may obtain financing through a loan or mortgage to finance a real estate purchase using a Self-Directed Roth IRA LLC. However, two important points must be considered when selecting this option:

  • Loan must be non-recourse – A “prohibited transaction” is a transaction that, directly or indirectly involves the loan of money or other extension of credit between a plan and a disqualified person. Normally, when an individual purchases real estate with a mortgage, the traditional loan provides for recourse against the borrower (i.e., personal liability for the mortgage). However, if the IRA purchases real estate and secures a mortgage for the purchase, the loan must be non-recourse; otherwise this will be a prohibited transaction. A non-recourse loan only uses the property for collateral. In the event of default, the lender can collect only the property and cannot go after the IRA itself.
  • Tax is due on profits from leveraged real estate – Pursuant to Code Section 514, if your Self-Directed Roth IRA LLC uses non-recourse debt financing (i.e., a loan) on a real estate investment, some portion of each item of gross income from the property are subject to Unrelated Business Income Tax (UBIT). Debt-financed property” refers to borrowing money to purchase the real estate (i.e., a leveraged asset that is held to produce income). In such cases, only the income attributable to the financed portion of the property is taxed; gain on the profit from the sale of the leveraged assets is also UDFI (unless the debt is paid off more than 12 months before the property is sold). There are some important exceptions from UBIT: those exclusions relate to the central importance of investment in real estate – dividends, interest, annuities, royalties, most rentals from real estate, and gains/losses from the sale of real estate. However, rental income generated from real estate that is “debt financed” loses the exclusion, and that portion of the income becomes subject to UBIT. Thus, if the IRA borrows money to finance the purchase of real estate, the portion of the rental income attributable to that debt will be taxable as UBIT.

For example, if the average acquisition indebtedness is $50 and the average adjusted basis is $100, 50 percent of each item of gross income from the property is included in UBTI.

A Self-Directed Roth IRA LLC subject to UBTI is taxed at the trust tax rate because an IRA is considered a trust. For 2016, a Self-Directed Roth IRA LLC subject to UBTI is taxed at the following rates:

  • $0 – $2,500 = 15% of taxable income
  • $2,501 – $5,900 = $375 + 25% of the amount over $2500
  • $5,901 – $9,050 = $1,225 + 28% of the amount over $5,900
  • $9,051 – $12,300 = $2,107 + 33% of the amount over $9,050
  • $12,300 + = $3,179.50 + 39.6% of the amount over $12,300

The IRA Financial Group will take care of the entire setup of your Self-Directed Roth IRA LLC “Checkbook Control” structure. 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 IRA experts and tax and ERISA professionals are onsite greatly reducing the setup time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Self-Directed Roth IRA LLC “Checkbook Control” structure. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To learn more about using a Self-Directed Roth IRA LLC to invest in real estate, please contact one of our Self-Directed Roth IRA Experts at 800-472-0646 for more information.

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Dec 08

Why Choose IRA Financial Group as Your Self Directed IRA Facilitator?

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 Plans 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 or Solo 401(k) Plan establishment costs, 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. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Solo 401k Plan. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Contact us @ 800.472.0646 to speak with an IRA Expert today!

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