Taking Advantage of YOUR Self-Directed IRA (SDIRAs)
Did you know that you can take more control of your Self-Directed IRA? Your holding in a qualified Real Estate account can offer tax advantages that may not be found with traditional property purchases. What does this mean for you?
Well how about the ability to receive a higher rate of return? Tell me more!
What Is A SDIRA
According to PENSCO TRUST COMPANY the only difference from other IRAs is that the IRA owner has more control and flexibility when it comes to choosing investments.
IRA vs SDIRA
They are both sanctioned by the IRS and differ only in that the custodian or trustee permits investments in a broader class of assets than what is allowed by most custodians.
You can take the funds or a portion of the funds you have in a SDIRA and turn it into a down payment or fully fund the purchase of Real Estate, thus opening up the possibility for a great appreciation of YOUR funds. Most Financial Institution are using YOUR funds to purchase Real Estate Holdings and only giving you a small percentage of the return.
Want to learn more
Speak with your IRA holder about switching your IRA to a SDIRA. Next step is to speak with your Accountant about the benefits of a SDIRA and the ability to purchase Real Estate Investments.
So now you are asking… what should I know
What are the rules governing a SDIRA
This is were a good IRA Holding Company comes into play. There are restrictions to what you as the property owner can do in accordance with the tax advantages. All transactions must flow through the IRA first to be eligible for tax advantages. This means that all expenses related to the property from the down payment and mortgage payments (if any) to property taxes, insurance and repair expenses must be paid by the IRA itself. All revenue generated from the property, including income and capital gains, must be paid to the IRA before distribution can be taken by the investor(you).
Purchasing and Maintaining Real Estate in a SDIRA
There are various ways to take ownership of Real Estate. This will be discussed with you and your IRA Custodian. How is title taken in a SDIRA? The SDIRA is the actually purchaser of the investment property and is the Title holder. The title would be the Custodians name along with your name.
SDIRA Custodian or Trustees Limited Duties
Your SDIRA Custodian or Trustee has limited duties. They are responsible only for holding and administering the assets in the account, along with extensive record keeping required by the IRS and handle the reporting of all investments activity within the account including quarterly reports, processing of annual asset valuation and other documentation. The Custodian is not responsible for evaluating the merits or suitability of an investment, offer legal or tax advice or approve or endorse an investment.
You can not use the SDIRA for your personal use, only as an investment tool.
Note: This information was provided by PENSOCO TRUST COMPANY If you would like to receive a full copy of PENSOCO TRUST COMPANY’s Investor’s Guideline please send me an email. I am happy to share this information with you.