Investing Self-Directed IRA in Real Estate?
Posted by mom811 on Wednesday, October 8th, 2008
When I was last in Manila, by some circumstance, I have attended a seminar on real estate, and wow! I passed as a property consultant of a prestigious triple-A builder-turned-developer, and I have been excited about it! I’ve really planned to share this with you, but I’ll take this up in a later post.
For now, I’m trying to learn more on other aspects of real estate, especially when I encounter something new like this Self Directed IRA. Ah, so IRA is the short cut for Individual Retirement Account, which is a tax-deferred retirement account for an individual where this person sets aside money each year, with tax-deferred earnings provided withdrawals begin at age 59 1/2 or later (with a 10% penalty if earlier withdrawn). The exact amount depends on the year and the age.
Usually IRA owners invest their IRA in conventional ways such as stocks and bonds but these give them a lower return. Little is it known to them that there is an Internal Revenue Service (IRS) ruling allowing them to invest their IRA funds in nontraditional assets such as real estate such as land only, buildings, home rentals, or even to finance a business. Investing could therefore be varied, and of greater possibility of a higher return.
So an individual can open a self-directed IRA with an expert finance company which can be hired as a custodian to transfer his present IRA funds to this new account with a strategy that could be penalty-free and even tax-free.
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