Buying Rental Property With Self-Directed IRA
The IRS allows you to use Self-Directed IRAs to purchase real estate. Buying rental properties with a self-directed IRA falls into that category. Real estate is re-emerging as an asset class that more Americans have confidence and comfort in compared to the ups and downs of the stock market. Your rental property purchased with a self-directed IRA is exempt from taxes as long as all the income and gains go straight back to the Self-Directed IRA LLC. This makes purchasing rental properties with your self-directed IRA a very powerful investment.
About IRA Financial Group
Experience You Need
IRA Financial Group has over a decade of experience helping investors self-direct their retirement accounts.
A Team You Can Trust
Our tax and ERISA professionals have helped over 12,000 clients invest $3 billion in alternative assets.
IFG founder Adam Bergman is a leading voice on self-directed retirement & has authored 7 books on self-directing.
Find IRA Financial Group on Forbes! Adam Bergman is a frequent contributor to Forbes.com and an official member of the Forbes Financial Council.
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Our team will work one-on-one with you to establish a Self-Directed IRA, Solo 401(k) or ROBS solution that fits your goals.
Why Buy Rental Property Using a Self-Directed IRA LLC
Tax-Free Real Estate Income & Gains
A Self-Directed IRA Real Estate LLC with “Checkbook Control” is an IRS and tax court approved structure that will allow you to use your IRA funds to purchase real estate or make almost any other type of investment tax- free!
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 Self-Directed Real Estate IRA LLC Offers Tax-Free Growth
One of the main benefits of using a Self Directed IRA Real Estate LLC to make real estate investments is that all income and gains generated by the investment will be tax-deferred until distributions are taken or in the case of a Roth IRA tax-free!
Using a Traditional IRA to Purchase Real Estate – the Power of Tax Deferral
By using a Self Directed IRA Real Estate LLC to make real estate investments, the IRA owner is able to defer taxes on any real estate income or gains, thus, allowing the IRA owner to benefit in three ways. The first benefit is tax-free growth: instead of paying tax on the income or gains generated by the Self Directed IRA Real Estate, tax is paid only at a later date when a distribution is taken, leaving the investment to grow tax-free without interruption. The second benefit of tax deferral is that an IRA Real Estate investment is usually made when the IRA owner is in his or her highest income earning years and is thus subject to tax at a higher tax rate. The third benefit is the ability to defer taxes on investments in the face of increased federal income tax rates.
Roth IRAs and the Power of Tax-Free Investing
The primary tax benefit of using a Self-Directed Roth IRA LLC with “Checkbook Control” to purchase real estate is that all income and gains associated with the investment will flow back to the Roth IRA tax-free! So long as the IRA holder is over the age of 591/2 and the Roth IRA account has been established for longer than five years, a Roth IRA holder is not required to pay tax when receiving Roth IRA distributions. What this means is that all income, gains, and appreciation with respect to a Self Directed Roth IRA LLC investment can be distributed to the Roth IRA holder tax-free!
Gaining “Checkbook Control” is Quick & Easy
The IRA Financial Group will take care of setting up your entire Self-Directed IRA Real Estate 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 in-house 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 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.
“What about your IRA, including rollover IRA? You need to look at state law, advises tax attorney Adam Bergman of New York’s IRA Financial Group.”
“Adam Bergman…gets several calls a day from clients like McDermott looking to invest their retirement funds in real estate. ‘Our average client has retirement accounts of about $150,000 and is looking to buy one or two properties.'”
“Jeff Brown…transferred roughly $50,000 from his workplace 401(k) to purchase homes to fix up and sell…He uses a self-directed IRA that he set up through IRA Financial Group in Miami Beach.”