Converting Your IRA to Real Estate

With daily stimuli packages it is really hard to keep up with all of the changes regarding investing  in real estate. One of the better articles that I have found is IRA FUNDS- UNTAPPED SOURCE OF MONEY TO BUY REAL ESTATE, written by Sean Gultig, who is a vice president at Trust Industrial Bank, also known as Fiserv Investment Support Services. http://www.fiserviss.com/.  The following information should not be relied on as tax advice.  All account owners should seek the advice of qualified tax and investment professionals before investing.

The following article has been extracted from "Funds- Untapped Source of Money to Buy Real Estate" with my personal comments, and opinions added.

IRA AND 401 K FUNDS UNTAPPED SOURCE OF MONEY TO BUY REAL ESTATE

With mortgage lenders tightening their restrictions and a depressed real estate market overall, A relatively

untapped source of funds that is gaining traction is for buyers to use money from their Individual

Retirement Accounts (IRAs).The amount of money individuals have in their IRAs today, combined

with the rollercoaster ride traditional investments such as stocks and mutual funds have had. More investors are looking at alternative investments such as real estate.

Advantages

Diversification - Buying real estate is one way to diversify an investment portfolio that primarily holds

stocks, bonds and mutual funds. The IRS does not specify what types of property investors can hold in

an IRA. Investments run the gamut from single-family and multi-unit homes to time shares, rental properties,

office buildings, parking lots and improved or unimproved land.

Tax benefits - An IRA may offer certain tax advantages including possible income tax deductions for

IRA contributions and deferred taxation of gains and appreciation (such as gains realized when selling real

estate held within an IRA).

Estate planning - Assets held in  IRA accounts are generally exempt from the claims of creditors. In addition,

purchasing property within an IRA can give your client a way to pass certain assets to beneficiaries

outside of probate.

Income for your IRA - Certain properties may generate positive cash flow within the IRA. Depending on

the type of retirement account, the income could be either tax deferred or non-taxable.

Disadvantages

Cannot use the property for personal purposes - Investors face the possibility of losing the tax protection of the entire IRA if the plan engages in what is considered a prohibited transaction. Examples of this would be if the IRA owner or a family member were to live in or use the property for personal purposes.

Other  IRS rules can apply a financial professional with the knowledge of these rules should be consulted.

Getting Started

 here are some tips for getting started.

1 First Step.  Give me a call 970-302-2367 or you can email your questions to me: Rhondacrs@msn.com

I can help  you  find  a custodian that allows real estate as an Investment and guide you how to  open a self-directed IRA.  And has an understanding of the rules and regulations. There are several things to consider when looking for a self-directed IRA custodian. Let me know if you would like to have more information  on self directed IRAs and 401 K

Investing in Real Estate with IRA money is a win/win

A self directed IRA account, in my opinion, would help alot of people protect what's left of their IRA's and 401K accounts.  With real estate you always have something to stand on.