Archive for October, 2013

Debt vs Retirement

Tuesday, October 29th, 2013

We continue to hear over and over again that saving for retirement is a must. Are we as Americans getting the big picture though? There is a growing trend that sure makes me worried and that paints a picture that we really aren’t getting the big picture. We happen to be acquiring more debt than what we are saving for retirement. Watch the full story from CNBC below.

Is this scary? If it isn’t worrisome to you than I hope you are on the right track for your own retirement. If you are part of this problem and aren’t worried, you should be! If you want to take control of your retirement let us help you. With self directed retirement accounts you can take control of your retirement and invest in things you actually want. Real estate, gold, silver, and other businesses are just a few of the types of investments available in self directed IRAs and 401ks. Get your retirement accounts in order now before it is too late. Diversifying your retirement accounts is a great way to start. Again, if you aren’t even saving for retirement and you just keep acquiring more debt than what you are saving that should be your first priority. Figure out how to save more than you spend! Start today at creating the best retirement possible. There is no better time than the present.

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FAQ About Precious Metals IRAs Including Gold & Silver IRAs

Monday, October 28th, 2013
Image courtesy of [Boykung] / FreeDigitalPhotos.net

Image courtesy of Boykung / FreeDigitalPhotos.net

One common investment into a self-directed IRA is precious metals. Many people like having a gold backed IRA because they own real gold. It doesn’t matter if you decide to have a gold IRA, silver IRA or other precious metals IRA you will own the real precious metal that you add to your IRA. If you are interested in a precious metals IRA or want a gold IRA investment to take a minute and make sure you understand some of the most common questions with this type of IRA. Below are the most common questions we get:

Q: How is the precious metal held and stored?

A: All precious metals are stored in our secure vault with Brinks. Tax law requires that a licensed custodian hold precious metals for your IRA. All metals are counted and verified upon receipt in the Brinks vault. You will receive an email notification along with a certificate of ownership when the metals are verified at the Brinks vault.

Q: Are there any taxes?

A: Holding precious metals is no different than any other investment held in your IRA. Any growth or gains in the metals are deferred until you start taking distributions from your IRA account.

Q: What types of metals can be held in the IRA?

A: Only gold coins that are legal tender with 0.9999 fineness are allowed in an IRA, with the exception of the American Gold Eagle, which has a fineness of 0.9167% fineness. Other gold coins allowed to be put into an IRA include the American Buffalo, Canadian Gold Maple Leaf, and Australian Gold Nugget. The popular South African Krugerrand is not permitted to be included in an American IRA because it’s fineness is only 0.9167%

The regulations that govern gold contributions to IRAs call for a minimum purity of only 0.995%, most gold bullion bars are 0.9999% pure.

Below is a list of the most common precious metals acceptable for being held in an IRA account:

Gold

  • American Eagle coins
  • Australian Kangaroo/Nugget coins
  • Austrian Philharmonic coins
  • Canadian Maple Leaf coins
  • Credit Suisse – Pamp Suisse Bars .999
  • U.S. Buffalo Gold Uncirculated coins (no Proofs)
  • Bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements2

Silver

  • American Eagle coins
  • Australian Kangaroo/Nugget coins
  • Austrian Philharmonic coins
  • Canadian Maple Leaf coins
  • Mexican Libertad coins
  • Bars and rounds manufactured by a NYMEX or COMEX approved refiner/assayer or national government mint and meeting minimum fineness requirements2

Q: Can my annual contribution be bullion or coins that I personally own?

A: No, Any annual Roth or Traditional contribution must be in the form of cash (currency). Rollovers and Transfers, though, do not need to be in the form of cash.

Q: Can I take distributions of the physical metal instead of taking cash?

A: Yes. Distributions from an IRA can be cash or non-cash. The only issue will be that the distribution will usually be taxable to you (except for a Roth IRA), which would mean that you would either have to liquidate enough metals to pay the taxes or you would have to use cash from your personal accounts to pay the taxes.

Author: , Self Directed IRA Professional
1.801.683.9291
[email protected]

Top 10 Mistakes People Make with Self Directed IRAs Part 2

Tuesday, October 22nd, 2013

Retirement-on-Beach-Part-2.jpg

We are continue a post that we started last week entitled Top 10 Mistakes People Make with Self Directed IRAs Part 1. As we continue this post we will now touch on five more mistakes that are common among self directed IRAs. As always, we are here to help those of you who need a self directed IRA or can answer any questions. Feel free to contact us at any time for professional information.

  1. No Rules Can Be Violated When Dealing With A non-Disqualified Party

    One of the key tenets of IRAs is there is a specific list of persons and entities which are prohibited from interacting with your IRA. This leads people to believe that if you are not on the "list" (IRC 4975), then any transaction would be allowed. Click the header to learn more.

  2. Self directed IRA owner attempts to receive fees and commissions from IRA transactions

    There are cases where the self directed IRA owner is a real estate agent and they want to earn a commission from selling property to their IRA or some other disqualified party's self directed IRA. Such a transaction would be viewed as conducting a transaction with your IRA or receiving an indirect benefit.
    Click the header to learn more.

  3. IRA owner loans money to a third party with equity kicker in order to avoid UBTI

    Click the header to learn more.

  4. Two or more IRA owners agree to "loan" each other money to avoid prohibited transactions

    Interacting with your IRA is considered a prohibited transaction. So, unrelated, self directed IRA owners will attempt to enter into a reciprocal agreement to loan each others self directed IRA money so that the IRA owners can indirectly tap their funds for personal use.
    Click the header to learn more.

  5. Self Directed IRA Owners Flipping Real Estate is Not UBTI

    The receipt of rental income is considered to be passive income and therefore not subject to UBTI. However, some self directed IRA owners fall into the trap of thinking that this means that they can buy and sell properties on a routine basis (i.e. flipping).
    Click the header to learn more.

The information contained in this publication is intended for educational and informational purposes only. If you have a specific situation that requires interpretation as relates to self directed IRA and prohibited transactions you should seek the advice of a tax advsior.

Read the first five mistakes at Top 10 Mistakes People Make with Self Directed IRAs Part 1

Author: , Self Directed IRA Professional
1.801.683.9291
[email protected]

Top 10 Mistakes People Make with Self Directed IRAs Part 1

Friday, October 18th, 2013

Retirement on Beach copy

It can be hard sometimes to make sure your doing everything correctly with your self directed IRA. We want to help make sure you do not make the mistakes that are most common. If you have any questions about the following information feel free to contact us.

  1. Making a personal guarantee

    The IRA account owner is considered a “disqualified person” and cannot provide a personal guarantee of a loan for the IRA.
    Click the header to learn more.

  2. Making an IRA contribution by depositing it directly into the ICO (IRA-LLC) checking account versus directly with the IRA custodian
    Click the header to learn more.
  3. IRA owner individually signs an agreement on property they want to buy with their IRA.

    IRA owner attempt to delay setting up the self directed IRA or the LLC until they are on the cusp of getting the property. This usually results in a case where the IRA account owner, personally enters into the buy-sell agreement to acquire the property, and even puts down personal money for the property. The account owner then either sets up the self directed IRA account and/or the LLC that will hold the property.
    This is a very flawed approach. For one, the property must be owned and titled in the name of the IRA account or the LLC. Secondly, you cannot use your personal funds in conjunction with the IRA. The IRA must have the ability to buy the property on its own without you providing any indirect benefit. You putting down monies in advance could be construed as a case where your IRA could not have entered into the transaction on its own because it was not setup.
    Click the header to learn more.

  4. Self directed IRA owner thinks a passive investment in active business is not subject to UBTI

    UBTI is the tax that levels the playing field for tax exempt entities that invest and compete against businesses that pay taxes.
    Click the header to learn more.

  5. IRA owner uses personal assets or “Sweat Equity” for the benefit of the IRA.

    A self directed IRA owner is clearly allowed to guide and manage the investments of the self directed IRA. The management can be relatively involved and substantial. Click the header to learn more.
    Click the header to learn more.

The information contained in this publication is intended for educational and informational purposes only. If you have a specific situation that requires interpretation as relates to self directed IRA and prohibited transactions you should seek the advice of a tax advsior.

Want to read the next five mistakes? Read Top 10 Mistakes People Make with Self Directed IRAs Part 2

Author: , Self Directed IRA Professional
1.801.683.9291
[email protected]

Interesting Retirement Statistics

Tuesday, October 15th, 2013

I am a numbers man. I love looking at numbers and analyzing them to see what they mean. One thing is for certain about numbers, it can be fairly easy to spin the numbers in just about any way to prove a point you are trying to prove. Regardless, numbers are numbers and they do show a picture of what is going on. With that being said let’s look into some interesting retirement stats.

With Retirement being what we specialize in I decided it was important to look into how retirement is going currently for those retired and if we could learn anything from those in retirement or about to retire. First, retirement is a big step in our lives and because of that we need to make sure we are ready for it. Take a second to look at the following statistics and hopefully you can learn from them. Click on the image for an easier to read version.

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