How To Invest In Real Estate With SDIRAs and Checkbook Control

Tax Free Real Estate Investing With Self-Directed Retirement Accounts: SDIRA, QRP & 401k

Did you know that you can use a Traditional IRA and Roth IRA to invest in real estate tax free? Do you know the difference between a Traditional IRA and Roth IRA? In this post you’ll get an overview of these accounts and how you can use a self-directed IRA with checkbook control for real estate investing.

What is a Traditional IRA?

An IRA, or Individual Retirement Arrangement, is described in Section 408 of the Tax Code and provides for tax deductions and tax-deferred returns on investments in the account. You get a tax deduction for each dollar you put into the account, up to $5,500 per year or $6,500 for those aged 50 and up – and no taxes are paid earnings in the account. When funds are distributed from the account at retirement income tax must be paid.

What is Roth IRA?

A Roth IRA, described in Section 408A of the Tax Code, provides for the reverse treatment. There’s no tax deduction for contributions to the account, but investment returns within a Roth IRA are completely tax-free, forever. If you may have very high returns on your retirement account investments a Roth IRA is preferable to a Traditional IRA.

What Assets Can An IRA Invest In?

According to the tax code and regulations, an IRA can invest in anything other than life insurance, collectibles, and S-Corp stock. That means real estate, private loans, tax liens, private stock, and any investment you can think of ARE allowable.

What is NOT a Self-Directed IRA?

Technically, all IRAs are self-directed. When you open an IRA at Schwab, Fidelity, or another brokerage, they don’t choose the investments for you (unless you pay them to do so). You’re free to choose from among any stock or mutual fund available on their platform.

If you’d like to invest in real estate, as allowed by the tax code, the brokerage representative informs you that doing so is not allowed. Says who? Not the IRS. The IRS follows the tax code which allows real estate investing. The reason brokers don’t allow investing in real estate on their platforms is that they’re not able to handle those investments and make money off you.

What is a “Traditional” Self-Directed IRA (SDIRA)?

A traditional Self-Directed IRA is an IRA held by specialized trust companies that are capable of administering non-traditional IRA investments, such as real estate and private loans. In a traditional SDIRA the custodian holds the IRA cash and handles all investment paperwork as trustee of your SDIRA. Being that these companies don’t have investment platforms they generate revenue from administrative fees, which can be substantial. In addition, every disbursement and every deal doc must be processed, approved, and signed for by the trustee. This can cost you valuable time when you’re trying to close a deal.

What is a self-directed checkbook control IRA?

A checkbook control SDIRA has all the benefits of a traditional SDIRA without any of the downside. A checkbook control IRA gives you direct control of the cash in your IRA and allows you to sign all deal documents. With a Checkbook IRA, custodian fees are minimized and investment flexibility is maximized. Checkbook IRAs use a specialized IRA-LLC structure to that enables you to handle real estate IRA investments with the same ease as real estate deals outside of a retirement account.

Should I use a self-directed Solo 401k for real estate investments?

Self-directed Solo 401(k)s are a great vehicle for retirement plan real estate investing and extensive tax benefits for those that qualify. However, not everybody qualifies for these but it is definitely something you should explore.

ReSure is led by Bernard Reisz CPA and assists investors nationwide with total control SDIRA, QRP & 401k. Whether you’re looking to invest in real estate or the stock market, the ReSure team can help you do so with confidence.

Broad Financial Review of Solo 401k

This broad financial review of Solo 401k provides the ultimate Solo 401k high-level guidance to investing in alternative assets, including real estate, cryptocurrency, Bitcoin, hard-money lending, private lending, private equitytax liens, gold & silver, and many other alternative assets. Continue reading “Broad Financial Review of Solo 401k”

Solo 401k & 199A QBI Tax Deduction

Every Checkbook Solo 401k investor is impacted by the tax innovation introduced by The Tax Cuts and Jobs Act. The key provision of Tax Reform for Solo 401k adopters to focus on is the new IRC 199A 20% Qualified Business Income – QBI – tax deduction. By definition Solo 401k and QBI go hand-in-hand – and  a Solo 401k can help you maximize the value of this impactful tax deduction. Continue reading “Solo 401k & 199A QBI Tax Deduction”

Solo 401k Contributions: Understanding & Optimizing

Solo 401k contributions to a Checkbook-Control Qualified Retirement Plan – a Checkbook QRP – have multiple tax benefits: (1) They are tax-deductible, reducing your taxable income & tax liability to the IRS and (2) they grow tax-deferred, with no annual taxes on earnings and profits within the Solo 401k.

Tax-deductible Solo 401(k) contributions consist of 2 components: (1) Employee Elective Deferrals and (2) Employer Non-Elective Contributions (profit sharing). However, you may have heard various other terms used to describe 401(k) Plan contribution types. Following is a comprehensive guide to Solo 401k contributions, terms,  and calculations. Continue reading “Solo 401k Contributions: Understanding & Optimizing”

Podcast: Solo 401k 2018 Year End Tax Strategy & FAQ

A Self-Directed Solo 401k With Checkbook Control is a powerful tax planning tool, providing $10,000’s – up to $122,000 of annual tax deductions. Since the passing of tax reform in 2017, the Checkbook 401k has become even more important, as a key tool for maximizing Section 199A Qualified Business Income 20% tax-deductions. For key 2018 year-end tax strategy and tips, listen to Commercial Real Estate Pro Network Show Episode 172: Solo 401K with Bernard Reisz and J Darrin Gross. Continue reading “Podcast: Solo 401k 2018 Year End Tax Strategy & FAQ”

Podcast: Checkbook IRA & 401k For Real Estate Syndicators

Real Estate Syndication and Checkbook IRAs & Checkbook 401(k) Plans are the perfect match! Real estate syndicators raise capital for real estate deals and Self-Directed Retirement Accounts could, potentially, provide ~$28,000,000,000,000 to investment sponsors. Checkbook Control Retirement Accounts are the ideal bridge between those that need investment capital and those that have investable tax-sheltered assets.

Both syndicators and passive real estate investors will benefit from education about the incredible opportunity presented by Self-Directed IRAs and 401k plans, as well as the IRS guidelines that govern them. For a syndicator-centric perspective of SDIRA and SD401k real estate investing, listen to this episode of The Real Estate Syndication Show, hosted by real estate investor and syndicator Whitney Sewell of Life Bridge Capital. Continue reading “Podcast: Checkbook IRA & 401k For Real Estate Syndicators”

Podcast: Everything You Need To Know About Self-Directed Retirement Investing

Get answers to the most common questions  – and learn advanced strategies – related to Self-Directed IRA, Checkbook IRA, Self-Directed Solo 401k, and Checkbook 401k. Bernard Reisz CPA was interviewed by John Casmon of Casmon Capital for the Target Market Insights podcast to answer frequently asked questions about the use of tax-sheltered retirement accounts for real estate investing. Continue reading “Podcast: Everything You Need To Know About Self-Directed Retirement Investing”

Solo 401k Podcast: How It Integrates With Your Total Tax Strategy

Great Solo 401k Checkbook podcast discussion with Mark Jensen, leader of the Mark Jensen Commercial Real Estate Team, in which we challenged standard tax and financial assumptions. If you’re in real estate sales, mortgage brokering, or get real estate management/syndication revenue, this one’s for you: Continue reading “Solo 401k Podcast: How It Integrates With Your Total Tax Strategy”

Private Lending & Checkbook IRA/401K: How To Get Into Real Estate Podcast

Just posted and already has hundreds of downloads! Listen at The Real Blue Spruce.

On this episode with Adam A. Adams, get answers to:

  • What is real estate private lending?
  • How can I earn passive income through private lending?
  • What are the risks of private lending?
  • What are some private lending strategies?
  • How to protect your private lending investment?
  • How can I invest in private lending TAX-FREE with a Checkbook IRA/401K?
  • How can I leverage my IRA/401k to get into real estate investing?
  • How can I leverage private lending to learn how to invest in real estate?

Tax Podcast: Structuring Your Real Estate & Crypto Investments

In this episode of REAL ESTATE RADIO LIVE WITH JOE CUCCHIARA, we discuss different  types of real estate investments – buy-and-hold real estate, real estate wholesaling, real estate flipping, real estate private lending, real estate tax liens & deeds  – their respective tax treatment, and the importance of using the optimal tax entity to achieve the greatest tax savings for each. Cryptocurrency taxation and crypto tax strategy are also covered. Continue reading “Tax Podcast: Structuring Your Real Estate & Crypto Investments”