Self-Directed IRA investors using vacation rental websites to generate strong returns.
IRA Financial Group, the leading provider of “checkbook control” self-directed IRA LLC solutions, has seen a surge of clients interested in using the retirement funds to make all cash real estate investments in order to list the properties on Airbnb as vacation rentals. Airbnb is a trusted community marketplace for people to list, discover, and book unique accommodations around the world. Airbnb connects people to unique travel experiences, at any price point, in more than 34,000 cities and 190 countries. “More and more clients are looking to list their IRA LLC investment properties on Airbnb in order to generate strong income returns,“ stated Jacky Ospina, a retirement tax specialist with the IRA Financial Group.
The primary advantage of using a Self Directed IRA LLC to make investments is that all income and gains associated with the IRA investment grow tax-deferred.
With IRA Financial Group’s self directed IRA LLC solution, traditional IRA or Roth IRA funds can be used to buy property tax-deferred or tax-free, in the case of a Roth IRA. “With depressed real estate prices, many retirement investors are looking to buy their dream retirement home with IRA funds as a year-end tax planning solution stated, Ms Ospina.
IRA Financial Group’s Self-Directed IRA for real estate investors, also called a real estate IRA with checkbook control, is an IRS approved structure that allows one to use their retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA LLC involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the Roth IRA custodian) and managed by the IRA holder or any third-party. As manager of the IRA LLC, the IRA owner will have control over the IRA assets to make traditional as well as non-traditional investments, such as real estate.
Using IRA Financial Group’s self directed IRA LLC with “checkbook control” solution to make real estate investments offers a number of very interesting investment opportunities, including the ability to diversify ones retirement portfolio with real estate, precious metals, and other alternative investment options.
According to Adam Bergman, a tax partner with the IRA Financial Group, listing a self-directed real estate IRA property on a website such as Airbnb can provide a valuable income stream for real estate IRA investors. However, using a website such Airbnb to list a property owned by a retirement account could potentially trigger a tax. Because Airbnb and other similar short term vacation rental sites offer rental properties for short periods of time, the rental property can be viewed more as a hotel than a long term rental unit. Accordingly, under the IRS rules pursuant to Internal Revenue Code Section 512, the income from the short term rental associated with a self-directed IRA could be treated as active trade or business income and become subject to the unrelated business taxable income (“UBTI) rules and be subject to a tax. “The UBTI tax rules are quite complex and can subject retirement investments to taxation in certain cases, such as investments in an active trade or business through a passthrough entity, the use of margin, or the use of a non-recourse loan,“ stated Mr. Bergman.
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.
IRA Financial Group is the market’s leading “checkbook control Self Directed IRA Facilitator. 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.