Harness the power of real estate and alternative asset investing in an IRA to make tax-free or tax-deferred profits for the rest of your life!
After completing a successful real estate transaction, do you ever wish a chunk of the profits didn’t have to go back to the IRS for taxes? Do you ever dream about how many more real estate deals you could do or how many more properties you could buy if profits weren’t split with the government because of taxes?
Well dream no more. Realizing tax-free or tax-deferred profits on real estate Top Oro Valley Realtor and alternative asset investing is a reality.
Government sponsored retirement plans such as IRAs and 401(k)s allow you to invest in almost anything (including real estate), not just stocks, bonds and mutual funds. And all the benefits those plans provide, tax-deductions and tax-free profits, apply to whatever investment you choose, including real estate.
The Power of Tax-Deferred and Tax-Free Profits
“The most powerful force on Earth is compounding interest.” – Albert Einstein
One of an IRA’s greatest features is that it allows Americans to enjoy the true power of tax-deferred compounding interest. Compound interest occurs when interest is earned on a principal sum along with any accumulated interest on that sum. In other words, you are earning interest not only on your original investment sum, but also on the interest earned from the original sum.
Compound interest can occur with any investment you make, but the “true” power of compounding interest is obtained when you make an investment in a tax-deferred environment, like an IRA.
By taking advantage of an IRA’s tax-deferred status, you do not have to pay tax immediately on your earnings (like the sale of a property or rent collected). Thus, you are able to enjoy the power of compounding on ALL of your profit, not just what is left after taxes.
Now apply those benefits to your real estate or alternative asset investing. Tax-deferred profits on your real estate transactions allows greater flexibility to make more investments, or to just sit back and watch your real estate investment grow in value, without worrying about taxes.
Is This for Real?
Most investors don’t know this opportunity exists because most IRA custodians do not offer truly self-directed IRAs that allow Americans to invest in real estate and other non-traditional investments.
Often, when you ask a custodian/trustee, “Can I invest in real estate with an IRA?” they will say, I’ve never heard of that” or, “No, you can’t do that.” What they really mean is that you can’t do this at their company because they only offer stocks, mutual funds, bonds, or CD products.
Only a truly self-directed IRA custodian like Equity Trust Company (www.trustetc.com) will allow you to invest in all forms of real estate or any other investments not prohibited by the Internal Revenue Service.
Is This Legal?
It sure is. For more than 33 years and through the management of $2 billion in IRA assets, Equity Trust has assisted clients in increasing their financial wealth by investing in a variety of opportunities from real estate and private placements to stocks and bonds in self-directed IRAs and small business retirement plans.
IRS Publication 590 (dealing with IRAs) states what investments are prohibited; these investments include artwork, stamps, rugs, antiques, and gems. All other investments, including stocks, bonds, mutual funds, real estate, mortgages, and private placements, are perfectly acceptable as long as IRS rules governing retirement plans are followed (To view IRS Publication 590, please visit [http://www.trustetc.com/links/irspubs.html]).
“Is it hard to do?” is a common question about investing in real estate with a self-directed IRA. It is really simple and is very similar to the way you currently invest in real estate. The following five steps demonstrate how easy it is to invest in real estate, or just about anything else, with a self-directed IRA.