The world of real estate contains many profitable business opportunities. But it also comes with taxes. You know, those things your friends at the IRS keep misplacing every year.
If you're flipping homes, you know the bottom line is dollar signs. So how do you increase your bottom line?By decreasing your expenses, AKA the taxes you pay. The easiest way to do this is by employing a Self-Directed IRA LLC.
Let's talk about how exactly this is done and what advantages this method offers.
Flipping homes and other real estate transactions are made easy with a Self-Directed IRA. With your Self-Directed IRA LLC you will have the authority to make real estate investment decisions on behalf of your IRA.
You can pay for the improvements, sell or flip the property on your own without needing the consent of an IRA custodian.
Another benefit of purchasing real estate with a Self-Directed IRA is that all income and gains are tax deferred until a distribution is taken. In the case of a Self-Directed Roth IRA LLC, all gains are tax free.
Unlike a conventional IRA which requires custodian fees and consent, a Self-Directed IRA LLC will allow you to buy real estate by simply writing a check.
Since all your IRA funds will be held at a local bank in the name of the Self-Directed IRA LLC, transactions are simple. All you will need to do to engage in a house flipping transaction is write a check straight from the IRA LLC account or wire the funds from the IRA LLC bank account.
There's no need to ask an IRA custodian for permission or have an IRA custodian sign the real estate transaction documents.
Remember, when you're flipping homes with a Self-Directed IRA all gains are tax-deferred until a distribution is taken (Traditional IRA distributions are not required until the IRA owner turns 70 1/2). In the case of a Self-Directed Roth IRA LLC, all gains are tax free.Royal Legal Solutions can set up your entire Self-Directed IRA LLC. The whole process can be handled by phone, online or even through the mail. It usually takes a week or two. Contact us about establishing yours today.
Note: The timing largely depending on the state you want your Self-Directed IRA LLC in and the current custodian holding your retirement funds.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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