In 1997, Congress introduced the Roth IRA to be like a traditional IRA, but with a few attractive modifications. The big advantage of a Roth IRA is that if you qualify to make contributions, all distributions from the Roth IRA are tax-free – even the investment returns – as long as the distributions meet certain requirements. In addition, unlike traditional IRAs, you may contribute to a Roth IRA for as long as you continue to have earned income (in the case of a traditional IRA, you can’t make contributions after you reach age 701/2).
NEW RULES FOR CONVERSIONS FROM IRAS TO ROTH IRAS
For tax years starting in 2011, the $100,000 modified adjusted gross income limit for conversations to Roth IRA is eliminated and married taxpayers filing a separate return can now convert amounts to a Roth IRA.
The Self-Directed Roth IRA LLC Secret
Alternative investments such as real estate have always been permitted in IRAs, but few people seemed to know about this option- until the last several years. This is because large financial institutions have little incentive to recommend something other than stocks, bonds or mutual funds which bring in extremely profitable commissions and fees for them.
There are approximately 2.5 million Self-Directed IRA accounts in the United States, a large portion of which are Roth IRA accounts. In the last several years, the number of Self-Directed IRA LLC accounts has grown significantly. The significant increase in the number of Self-Directed IRAs formed can be largely attributed due to the poor performance of the stock market, the growth of the real estate market, the lack of liquidity in the small business loan market, and the increase in media coverage by the Wall Street Journal, CNBC, The New York Times, Business Week, and some of the other major financial media companies.
It is not entirely uncommon for a tax or financial advisor to have not heard of self-directed IRAs given the fact that the traditional financial institutions have concealed their benefits due to their focus on selling the more profitable equities, bonds, and mutual funds.
The Self-Directed Roth IRA LLC Solution
The Self-Directed IRA LLC structure was affirmed in the Tax Court case Swanson v. Commissioner, 106 T.C. 76 (1996), and further confirmed by the IRS in Field Service Advisory (FSA) 200128011 (April 6, 2001).
A Self-Directed Roth IRA LLC offers one the ability to use his or her retirement funds to make almost any type of investment on their own without requiring the consent of any custodian or person. Tired of being forced to invest in stocks or mutual funds? Have an investment opportunity, such as real estate or a business investment that you would love to make with your Roth IRA funds? Then the Self-Directed Roth IRA LLC is your solution. In addition to the tremendous Roth IRA benefits (tax-free profits, tax deductions, asset protection and estate planning), the Self-Directed Roth IRA LLC allows you to invest tax-free in investments that you know and understand. Aside from life insurance, collectibles and certain "prohibited transaction" investments outlined in Internal Revenue Code Section 4975, a Self-Directed IRA can invest in most commonly made investments, including real estate, private business entities, public stocks, private stocks, and commercial paper.
The self-directed Roth IRA LLC, similar to a Self-Directed IRA LLC, allows the IRA holder to:
- Use the same Self-Directed Roth 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 now at today’s prices, rent it out, and then move in tax-free at the age of 59 1/2!
- Buy a vacation home now at today’s prices anywhere in the world, rent it out, and then use it tax-free at the age of 59 1/2!
- Buy an office building now at today’s prices, rent it out, and then move your business in tax-free at the age of 59 1/2.
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 the Self-Directed Roth IRA LLC structure, contact one of our IRA Professionals at 800-IRA-0646 today!
Did you know? You should not co-mingle personal and IRA funds in a Self-Directed Roth IRA LLC transaction.