Does IRA Real Estate Protect Or Reveal Assets?
It seems that IRA real estate (something I know nothing about but see occasional articles on) would go in the opposite direction of asset protection. Am I right or wrong, about one's IRA revealing way too much to the world about how much RE is owned?
After all, unless the IRA is called some other name, one's name is out there for all to see. Perhaps one could call the IRA something else and appoint oneself in charge of it like an LLC, or a trustee as if it is a living trust.
Well, CREIers, there it is! Please help me understand if you can.
SIncerely,
Alan
retirement funds have certain preferentail treatment when it come to being an asset, wether in stock or RE in an IRA.
It's easy enough to start and LLC/Corp w/ the $$ from the IRA and then use the corp/llc to invest.
Profit/losses from thru to IRA
Actually, the legal vesting listed on the investment would be in the name of the IRA custodian and not the actual investor.
It does not mention the actual investors name unless the investor specifically requests it.
Retirement plans also enjoy certain protections above normal assets as well. You have additional protection if you use an LLC, too.
[ Edited by JohnMerchant on Date 05/24/2004 ]
Is an LLC preferable?
It's starting to sound like an IRA without personally being named in the ownership is even better.
Alan
It depends on what you are trying to do and why you are considering an LLC. It will certainly protect the rest of your IRA assets in the event of litigation and it may get around any UBTI issues that may arise.
You should also look at the end result and the type of IRA that you are using. The funds that you withdraw from your IRA at retirement will be taxable at ordinary income tax rates if you have a Traditional IRA and will be tax free if you have a Roth IRA. You need to balance that with today's current income tax effect. You may want to include assets such as trust deeds, mortgages, tax lien certificates, tenant-in-common interests (syndicated interests) in your IRA because they would be taxable today at ordinary income tax rates and look at holding your real estate outside of your IRA so that you can take advantage of the capital gain tax rates. You also can not take depreciation on the property if it is held inside your IRA.
An IRA should be used for the TAX TREATMENT and not for asset protection.
There is no asset protection when using an IRA to invest. To get checkbook access to your IRA, transfer it to a self directed IRA account and instruct them to make an unsecured loan to your company (in your company name).
Quote: "...look at holding your real estate outside of your IRA so that you can take advantage of the capital gain tax rates."
I never heard of a person desiring to be hit with a capital gains rate. * Is the capital gains tax % less than income tax %.
* And I guess an IRA not in my own name isn't possible? *
Thanks for great replies:
IRA for tax savings with compounded growth on greater initial savings (hence larger eventual growth even if taxes later have to be paid on withdrawals), and LCC's for asset protection.
Alan