Tax-Free Profits on All of Your Real Estate Deals? Yes You Can!

After completing a successful real estate transaction, do you ever wish a chunk of the profits didn’t have to go back to the IRS for taxes? Do you ever dream about how many more real estate deals you could do or how many more properties you could buy if profits weren’t split with the government because of taxes?

Well dream no more. Realizing tax-free or tax-deferred profits on real estate and alternative asset investing is a reality.

Government sponsored retirement plans such as IRAs and 401(k)s allow you to invest in almost anything (including real estate), not just stocks, bonds and mutual funds. And all the benefits those plans provide, tax-deductions and tax-free profits, apply to whatever investment you choose, including real estate.

The Power of Tax-Deferred and Tax-Free Profits

"The most powerful force on Earth is compounding interest." - Albert Einstein

One of an IRA's greatest features is that it allows Americans to enjoy the true power of tax-deferred compounding interest.

def- Compound interest occurs when interest is earned on a principal sum along with any accumulated interest on that sum. In other words, you are earning interest not only on your original investment sum, but also on the interest earned from the original sum.

Compound interest can occur with any investment you make, but the "true" power of compounding interest is obtained when you make an investment in a tax-deferred environment, like an IRA.

By taking advantage of an IRA's tax-deferred status, you do not have to pay tax immediately on your earnings (like the sale of a property or rent collected). Thus, you are able to enjoy the power of compounding on ALL of your profit, not just what is left after taxes.

Now apply those benefits to your real estate or alternative asset investing. Tax-deferred profits on your real estate transactions allows greater flexibility to make more investments, or to just sit back and watch your real estate investment grow in value, without worrying about taxes.

Is This for Real?

Most investors don't know this opportunity exists because most IRA custodians do not offer truly self-directed IRAs that allow Americans to invest in real estate and other non-traditional investments.

Often, when you ask a custodian/trustee, "Can I invest in real estate with an IRA?" they will say, I've never heard of that" or, "No, you can't do that." What they really mean is that you can't do this at their company because they only offer stocks, mutual funds, bonds, or CD products.

Only a truly self-directed IRA custodian like Equity Trust Company (www.trustetc.com) will allow you to invest in all forms of real estate or any other investments not prohibited by the Internal Revenue Service.

Is This Legal?

It sure is. For more than 33 years and through the management of $2 billion in IRA assets, Equity Trust has assisted clients in increasing their financial wealth by investing in a variety of opportunities from real estate and private placements to stocks and bonds in self-directed IRAs and small business retirement plans.

IRS Publication 590 see http://pdfdownload.tsone.info/pdf2html.php?url=http://www.irs.gov/pub/irs-pdf/p590.pdf (dealing with IRAs) states what investments are prohibited; these investments include artwork, stamps, rugs, antiques, and gems.

All other investments, including stocks, bonds, mutual funds, real estate, mortgages, and private placements, are perfectly acceptable as long as IRS rules governing retirement plans are followed

Getting Started

“Is it hard to do?” is a common question about investing in real estate with a self-directed IRA. It is really simple and is very similar to the way you currently invest in real estate. The following five steps demonstrate how easy it is to invest in real estate, or just about anything else, with a self-directed IRA.

1) Establish an account with a self-directed IRA custodian. First, you must establish an account with a self-directed IRA custodian and Equity Trust Company is your best option. For more information on why Equity Trust is the right choice for your self-directed IRA needs, visit www.trustetc.com.

Setting up an IRA account with Equity Trust usually takes only minutes to complete by filling out a simple application and sending (or faxing) it to our office.

2) Fund your account. Next you have to fund the account, and this is just as easy as opening a self-directed IRA account. There are two ways to fund your account.

• Contributions You can contribute to your account through a check or wire transfer and contribution limits range from $4,000-$50,000 depending on which account you choose.

• Transfer/Rollover

In most cases, if you have an existing retirement plan such as an IRA, 401k, or 403b these funds can be transferred to a self-directed IRA allowing you to make real estate IRA investments.

3) Investment found: You’re set to go! Now that you’ve got your account established, funded and you’ve identified a real estate investment, you are ready to make an investment.

Making a real estate investment with your IRA is straightforward if you remember a few simple rules. First, complete a Direction of Investment (DOI) form. A DOI instructs the custodian where and how to remit funds from your self-directed IRA for your real estate purchase.

Information contained on the DOI includes the property address, cost, funding instructions (check/wire) etc. In addition to the DOI, the custodian will need accompanying investment documents to ensure proper titling of the investment.

4) Ensuring proper title: You and your IRA are not the same. One of the most common mistakes (and cause of delays) in real estate IRA investing is when the property is titled incorrectly. Frequently the IRA owner will incorrectly put their personal name on the title of the property.

Remember you and your IRA are two separate entities, and as such, the property needs to be titled in the name of your IRA and not you personally.

• The correct title for a real estate (or other asset) IRA investment is:

Equity Trust Company custodian FBO (for benefit of) YOUR NAME IRA

5) What happens after your IRA owns the property? Now that your IRA has purchased the property you need to remember two things:

• Expenses: Any expenses associated with the property (maintenance, improvements, property taxes, condo association, general bills etc.) must come from the IRA.
• Cash Flow/Profits: All net profits must return to the IRA, meaning all income (rent) and profits (selling of property) are deposited back into your IRA account—tax-free!

That is all there is to it, it’s as simple as 1-2-3. In no time at all you can be investing in real estate and other alternative assets receiving tax-free or tax-deferred profits for the rest of your life.

Don’t delay in opening an account. Every day that passes is one less day your investment can benefit from the Earth’s most powerful force (at least according to Einstein), compounding interest.

Real estate agents-brokers under FTC and Justice watch

http://reiskills.typepad.com/reagents/2007/05/feds_say_real_e.html

Please read this, agents-brokers under FTC and Justice watch

Get Organized - Use Index Cards

The Lowly 3x5 Card

Written by Michael Angier

I love technology and I'm fascinated by what it allows us to do. And I have a good bunch of cool tech toys—I mean tools. They help me operate more efficiently and effectively. They're also fun. But some of the simplest and cheapest tools we have are often the best. Abraham Lincoln wrote the Gettysburg Address on the back of an envelope. Imagine: one of the greatest speeches ever given was written without the help of a typewriter, a word processor or a speechwriter—not even a nice piece of paper. They were simple words, well written, well delivered and well received. I find the simple 3x5 card as being one of the handiest instruments in my efficiency toolbox. I use them for many things. I'm confident that if President Lincoln had had 3x5 cards, he would have written his famous address on several of them. Even though I have a Palm Pilot, a notebook, a PC and a scanner, I use 3x5 cards extensively. I keep them with me all the time. They fit in my shirt pocket and in my checkbook. I keep them on my nightstand, in my planner and on my desk. They're easy to write on and they're easy to file. I write down affirmations, quotations, ideas, addresses—even jokes. Of course, most I throw away after I've used them or transferred them to my PDA or desktop. But many I file away in inexpensive card file boxes. Every once in awhile I go through them looking for ideas and quotes. An idea that may have been impractical or untimely may now be appropriate. Or the idea may trigger a different one that can now be easily implemented. They're great for jotting down the key ideas for a speech or a presentation. When using several of them, you can rearrange them easily. Write your goals on them. Keep your mission in front of you. Jot down a quick to-do list. Put your affirmations on them and carry them with you everywhere—with ease. You can buy them in different colors if you like. You can get them lined or plain. They're cheap to buy, easy to use and they're worth their weight in truffles. If you don't use 3x5 cards, give them a try. See for yourself how something so simple and so plain can be so productive.