Just added you 👍🏾 thank you for the content

@LivingOffRentals

2 ай бұрын

So happy to hear it was helpful! :)

Thanks!

great info!

@LivingOffRentals

2 ай бұрын

Really glad to hear it was valuable!👍

Fantastic video. Do you have a video that addresses the needs for a custodian or whether a bank account itself can be the custodian?

@LivingOffRentals

2 ай бұрын

I’ve actually switched over to Solera Bank for this reason (and lower fees) since recording this video. Solera is the custodian and the bank account holder. They help you set up an LLC so you have checkbook control over your IRA funds. I highly recommend.

Several things that are not mentioned....no profit is tax free. It is only deferred. Secondly, he does not mention the fact that the loan you secure for a mortgage when financing a house is not a regular loan. IRS code states, in essence, that when you are using Self Directed IRA funds and securing a loan for the financing it must be with a non-recourse mortgage. There are not a lot of banks that deal with this. They do exist but their interest rates are significantly higher. He doesn't mention the IRS code of UBIT. It is tricky stuff. Make sure you know the nuances and get solid advice from your CPA and a Real Estate Tax attorney before jumping into the deep end of the pool.

@LivingOffRentals

16 күн бұрын

Totally agree that you should ensure you understand all the details before taking action, however the gains that you make are tax free if you set up a Roth IRA (which is what we have and what I recommend). You pay income tax on the funds before contributing them, and then the gains grow and compound tax free, not tax deferred as they would in a traditional IRA.

I started researching more into this and there are still a lot of confusing parts to me. Can you please help me answer the questions? 1. If I hand over the property to a property manager, should they still generate a 1099 tax form for my IRA? And since the IRA is tax deferred, I assume I can just ignore that 1099 form. Is that right? Or should they never even generate the 1099 form? 2. IRA funds can be used to invest in a private entity. If I form an LLC, and let the IRA contribute funds to the LLC and be the 100% owner of that LLC, and let that LLC be the borrower for a commercial real estate non-recourse loan, then if there is any bank interest generated in the business checking/savin account of that LLC, against that federal EIN, can I just ignore it, because that LLC's income flows to the IRA and the IRA is tax deferred? Or should the bank never even generate any tax forms for any interests for this LLC's business accounts? 3. What's the small tax that you still have to pay when you borrow money from a private family member?

@LivingOffRentals

Ай бұрын

Great questions and I caveat everything with the disclaimer that only your accountant can give you tax advice, but in my experience, entities like property managers and banks should still issue you you 1099's since that is still money that was paid to your entity, however, it will not be taxable income since the growth compounds tax free. If you leverage your IRA funds with a loan, then you are still liable for UBIT tax on the portion that was leveraged. You can google the specifics on how UBIT tax works and your accountant can explain it, but it does get a little nuanced. Hope that helps! 😀

Great Video I learned alot. Where is the link to the Midland IRA Custodial organization. Thanks

@LivingOffRentals

2 ай бұрын

I’ve actually switched over to Solera Bank for this reason (and lower fees) since recording this video. Solera is the custodian and the bank account holder. They help you set up an LLC so you have checkbook control over your IRA funds. I highly recommend.

@LivingOffRentals

2 ай бұрын

I’ve actually switched over to Solera Bank for this reason (and lower fees) since recording this video. Solera is the custodian and the bank account holder. They help you set up an LLC so you have checkbook control over your IRA funds. I highly recommend.

Which financial institution do you use for your IRA for Real Estate? I'm with Edward Jones n my Advisor is Clueless on this concept. I need to fire him now! Thanks

@LivingOffRentals

4 ай бұрын

Yeah, traditional IRA institutions don't want you to know that self-directed IRA's are even an option. They can't make any fees on your money if you self-direct. I would move it from Edward Jones to Solera Bank if you want to self-direct. I used to use Midland IRA, but they increased their fees quite a bit. Solera's fees are super cheap (regardless of the size of your account) and they are a bank and IRA custodian in one, so they can set up a checkbook IRA for you so you can invest how you want!

wondering how you would structure the LLC if you were purchasing it through your IRA?

@LivingOffRentals

Жыл бұрын

Hi Joshua, can you clarify more what you mean by "structure?" I set up mine as my self-directed IRA as the only member of the LLC with 100% member ownership, and myself as the manger of the LLC. Let me know if you are looking for anything else.👍

It is not tax free unless it is in the Roth IRA. Otherwise, it is tax deferred.

@LivingOffRentals

3 жыл бұрын

Great point! This is a very important distinction to understand and pay attention to which applies when!

Does your personal credit matter if you are buying property woth your self directed IRA and getting a loan for part of the property value?

@LivingOffRentals

6 ай бұрын

Nope, these are non-recourse loans, so they cannot come after you personally if you were to default. This is why it's typical to only be able to borrow up to 50% LTV.

I am on SSDI (disibility) I dont have any income to offset with also I am 64 so if I have a 30 year note for the property how do I obey the IRS in regards to withdrawing at 70?

@LivingOffRentals

Жыл бұрын

Hi Steven, at 64 there should be no restrictions for withdrawing from you IRA. I always recommend talking to an accountant before taking money from your retirement accounts to ensure it fits into your overall tax strategy, but after 59.5 you are able to start withdrawing penalty free.

Have you bought any foreign rental properties?

@LivingOffRentals

Жыл бұрын

Not yet. I have considered it, but the numbers, financing options, and security of buying in the US have trumped anything I’ve seen internationally.

My rental income goes into my roth ira?

@LivingOffRentals

2 жыл бұрын

If you buy the asset inside your Roth IRA, the income produced from the asset should flow back into your Roth IRA as well.

@Austin.8150

2 жыл бұрын

@@LivingOffRentals ok so I can get more then 6k maximum if it's an asset?

@LivingOffRentals

2 жыл бұрын

@@Austin.8150 I think you are referring to the annual contribution limit. This is different and separate from the income you are allow to make by investing your IRA into assets. The limit you can contribute each year is $6k, however there is no limit on how much you can generate within your IRA through investments. Hope that helps!

@Austin.8150

2 жыл бұрын

@@LivingOffRentals thx! I would like a video explaining this, this would help!

@aaronshepard3423

Жыл бұрын

@@LivingOffRentals how do you do this