TAX STRATEGIES

  • MY STORY.  Let me take a few moments and tell my story. I worked for over 18 years in the corporate world managing over 100 employees and one day I decided that I had enough and retired. Yes, I had a good job with great pay but I wanted to explore my other passions of finance and real estate. Even though I had accomplished a lot in my life – B.S., M.S., Ph.D. – I really had an entrepreneurial drive and wanted to go out on my own. I therefore started my own business buying and selling houses and then later started buying residential mortgage notes.   When I saw the market topping in 2008 I decided to sale 3 of my properties and made a whooping $323,000 IN PROFITS!  I was super excited until about 6 months later when I found out someone had stole almost $100,000 of that away from me.  That person was good old UNCLE SAM the tax man!  I decided that would never happen to me again so I set out to study over the next year all the government sponsored savings plans (IRA, 401k, SEP, SIMPLE, etc) and I wanted to find a retirement plan that would substantially reduce or eliminate these tax burdens. I wanted to use my profits to grow my retirement account and not grow the goverments. Therefore, I started to research and test methods of tax deferred and tax free investing.  This has resulted in dramatically reducing the amount of time for me to reach my financial goals even without that corporate job. It is these strategies and methods that I wanted to share with others knowing that most people struggle with saving enough for retirment and this could make all the different to someone’s life.  
  • MY BOOK. The book is called “IRA & 401k Income Builder” which is a guide to increasing your income through real estate, mortgage notes and private lending using a self directed retirement plan.  The book is essentially a reference guide on what you can and can’t do in an IRA and explains how you can invest in alternative investments at higher returns and not have to limit yourself to traditional stocks, bonds and mutual funds.  Go to IRAIncomeBuilder.com for kindle or paperback versions. 
  • SELF DIRECTED EXPLAINED.   The term “Self-Directed IRA” (SDIRA) does not refer to a type of IRA, but rather, it describes who is responsible for investment choices …YOU… the account owner.  All types of IRAs (Traditional, Roth, SEP, SIMPLE) can be self-directed.
  • NO LEGAL DISTINCTION.  There is no legal disctinction between self-directed IRA and any other IRA except that a self-directed IRA allows you the broadest possible spectrum of investment choices.
  • CUSTODIAN.  Most people start out with what is called a custodial account where a company is the custodian and they sign paper work and transfer money on your IRA behalf.  There is also checkbook IRA and Solo 401k accounts which you are the administrator and trustee.  These are typically setup using a SEC attorney that has the proper documents and authority to do so. 
  • NO SELF DEALING.  You can’t sell property that you or a disqualified person already owns to your IRA.    
  • NO BUYING PROPERTY FOR PERSONAL USE.  You cannot receive personal benefits from assets in  the IRA. 
  • NO BORROWING MONEY.  You cannot borrow money from your IRA.  Unlike a 401k where you can borrow up to $50,000 or 50% of amount in 401k.  
  • NO PERSONAL GUARANTEE.  If buy a property using cash in your IRA and get a loan then you can’t personally sign and must be a non-recourse note.
  • NO USING IRA AS COLLATERAL.  Cannot use the IRA as security for a personal loan.