To follow up on a recent letter “How To Use Your IRA /401k to Fund a Survival Retreat Property“, I recommend that people try Equity Trust for IRA/401k management. (I am not employed by these folks nor are any of my family or friends). Their fees approximately 10% of the fees described in the article. With their trust services so there is no need to incorporate. I purchased our retreat in 08′ with my IRA, & have subsequently made other real estate purchases as well. Since then we not only have constructed a guest house but all the underground septic, well/water lines, & power lines with the IRA. Rents on other properties in the IRA are sent back to the IRA. This has worked out great for us.
One subject that was not covered is distribution of the assets. If the distribution is real estate and it is in one parcel, that is how it is distributed. You can’t distribute half a house. The value, which is added to your income that tax year, (not in a Roth IRA) could be a hefty tax all in one year depending on the property.
Should you incorporate the shares in the IRA they can be valued and sold but I am not sure you can buy them out of your IRA. The reason I say this is should you want (for whatever reason) to sell the property out of the IRA and put the cash back in the IRA it is no problem. However, you or your immediate family cannot be the purchaser. Lots of quirky rules. The main thing is you cannot use the property personally while it is in the retirement account. Using the property can result in a tax penalty or worse.
Bottom line is these folks at Equity can do this a lot cheaper and it is not a fly by night company. Having said this, I’ll bet there are other companies doing the same things at completive fees. – Mr. A.
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