Historically, real estate has given many Americans with a stable investment vehicle that offers both income and appreciation. One of the greatest tools available to real estate investors is the self-directed IRA, – a government-sponsored retirement plan that allows real property investments.
Most investors believe that their only IRA investment options are bank CDs, the stock market, and mutual funds.
Few Americans realize that they have the option to self-direct their IRAs and other retirement plans into real estate—and that they can benefit from the tax advantages those plans provide.
IRA investments earn tax-deferred/tax-free profits. Imagine not having to pay taxes right away—or ever—on your real estate deals. Instead of paying 25, or 30, or even 50 percent of your profits to the government in taxes, you keep it.
What is a Real Estate IRA?
A self-directed real estate IRA is technically no different than any other IRA (or 401k). The government created the IRA to allow investments to grow tax-free or tax-deferred compounded over time to maximize growth. The IRA can also qualify for yearly tax-deductions (depending on the account), provide asset protection and assets can be passed to future generations.
A self-directed real estate IRA is unique because it allows investments in real property.
$250 Processing Package or
$1,295 LLC Formation Package ^
Titan Bank Checking Account
N/A
required
Property Titling
Equity Trust Company Custodian FBO
[Account Owner’s Name][IRA/CESA/HSA]
LLC Name
(no reference to Equity Trust)
Tax ID (EIN for investments)
Equity Trust Tax ID: 05-0552743*
New EIN created for LLC
Payment Options:
ACH
Debit Card
Check
Time to have check in-hand
1-4 days**
Immediate
Checkbook Control
Limited Liability Protection
Unlimited free wire transfers
Unlimited free ACH
Record keeping of transactions***
Equity Trust myEQUITY
LLC manager of record keeping system
Real Estate IRA
Custody Costs
$50 new account set-up
AMF based on account value
LLC Costs
N/A
Titan Bank Checking Account
N/A
Property Titling
Equity Trust Company Custodian FBO
[Account Owner’s Name][IRA/CESA/HSA]
Tax ID (EIN for investments)
Equity Trust Tax ID: 05-0552743*
Payment Options:
ACH
Debit Card
Check
Time to have check in-hand
1-4 days**
Checkbook Control
Limited Liability Protection
Unlimited free wire transfers
Unlimited free ACH
Record keeping of transactions***
Equity Trust myEQUITY
Real Estate Checkbook IRA LLC
Custody Costs
$50 new account set-up
AMF based on account value
LLC Costs
$250 Processing Package or
$1,295 LLC Formation Package ^
Titan Bank Checking Account
required
Property Titling
LLC Name
(no reference to Equity Trust)
Tax ID (EIN for investments)
New EIN created for LLC
Payment Options:
ACH
Debit Card
Check
Time to have check in-hand
Immediate
Checkbook Control
Limited Liability Protection
Unlimited free wire transfers
Unlimited free ACH
Record keeping of transactions***
LLC manager of record keeping system
^ $250 LLC Processing Package includes dedicated Onboarding Specialist who will assist with processing the account open, funding, and transfer. Additionally, includes Real Estate Checkbook IRA LLC & Self-Directed IRA instructional videos.
$1,295 LLC Formation Package by Equity Doc Prep includes above plus LLC Formation (Operating Agreement, EIN, initial State registration fee up to $200), State filing fee, and one free wire transfer to checking account. Additional State surcharge may apply. All fees must be paid by the retirement account.
* In some instances, clients my have to obtain a unique EIN for their IRA. This is most common when a client is investing in a UBIT generating deal.
** Depends on if expedited service and subject to additional fees.
*** Transactions include all investments, expenses, and revenue (rents).
Investing in Real Estate with Your Retirement Account
Real Estate IRA FAQs
1
What is the difference between a self-directed IRA and a checkbook IRA?
Both a self-directed IRA and a checkbook IRA enable you to invest in real estate. If that self-directed IRA is also a checkbook IRA, that means you can write checks to pay for investments and expenses related to the investment inside the IRA.
2
Can my IRA purchase real estate that I currently own?
No. This is considered a prohibited transaction (see IRC 4975). You may not purchase a property, or interest in a property, that’s currently owned by a disqualified person, which includes yourself.
3
Am I restricted to only purchasing residential property with my IRA?
You are not limited to residential real estate. Your IRA can hold various investment properties such as commercial buildings, vacant land, condominiums, mobile homes and apartment buildings, in addition to residential property.
4
Can my IRA invest in a newly formed entity that will invest in real estate?
Yes. Investments in newly formed private entities, such as limited partnerships, limited liability companies, C corporations or land trusts, are permissible under the Internal Revenue Code, with the exceptions of subchapter S corporations.
Schedule a one-on-one session with an expert alternative investment counselor. We’re here to answer any questions, help guide you through the process, and provide more detailed information and education specific to your journey.
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By entering your information and clicking Start a Conversation, you consent to receive reoccurring automated marketing emails about Equity Trust’s products and services. This consent is not required to obtain products and services. If you do not consent to receive emails from Equity Trust and seek information, contact us at 855-233-4382.
By entering your information and clicking Start a Conversation, you consent to receive reoccurring automated marketing emails about Equity Trust’s products and services. This consent is not required to obtain products and services. If you do not consent to receive emails from Equity Trust and seek information, contact us at 855-233-4382.
