Comments on: Why I Don’t Want to Be Young Again http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Self-Directed IRA’s with Checkbook Control | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-217954 Self-Directed IRA’s with Checkbook Control | Rain City Guide | A Seattle Real Estate Blog... Wed, 28 Nov 2007 02:23:51 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-217954 [...] Self-Directed IRA’s with Checkbook Control November 27, 2007 I’ve blogged a couple of times here at RCG about the benefits of using a self-directed IRA as an investment vehicle in Real Estate. When I originally set up my self-directed IRA I loved that I could control my retirement funds not only in securities but also in real estate.  I had to educate myself by going to seminars and talking to the very few professionals that understood the process.  However, being the do-it-yourselfer that I am, I traveled around the country attending lectures and symposiums until it started sinking in. [...] [...] Self-Directed IRA’s with Checkbook Control November 27, 2007 I’ve blogged a couple of times here at RCG about the benefits of using a self-directed IRA as an investment vehicle in Real Estate. When I originally set up my self-directed IRA I loved that I could control my retirement funds not only in securities but also in real estate.  I had to educate myself by going to seminars and talking to the very few professionals that understood the process.  However, being the do-it-yourselfer that I am, I traveled around the country attending lectures and symposiums until it started sinking in. [...]

]]> By: Jennifer D. Meacham http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-205934 Jennifer D. Meacham Wed, 07 Nov 2007 20:02:13 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-205934 Ah Art, that would be because the income generated from money loaned to the IRA is indeed classified as "business activities not-related to their tax-exempt purpose." Someone has to be taxed for the extra money your IRA is able to make as a result of someone else fronting the money to do a deal. That's just how the IRS works. It only provides so much tax protection for IRA investments. Once you've borrowed money outside of your regular contributions then the Unrelated Business Income Tax (or a 6 percent penalty on personal over-contributions) applies. Does this layperson's explanation help? Ah Art, that would be because the income generated from money loaned to the IRA is indeed classified as “business activities not-related to their tax-exempt purpose.” Someone has to be taxed for the extra money your IRA is able to make as a result of someone else fronting the money to do a deal. That’s just how the IRS works. It only provides so much tax protection for IRA investments. Once you’ve borrowed money outside of your regular contributions then the Unrelated Business Income Tax (or a 6 percent penalty on personal over-contributions) applies. Does this layperson’s explanation help?

]]> By: Art http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-195256 Art Wed, 17 Oct 2007 17:36:46 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-195256 Where does the IRS state that a self-directed IRA must pay UBIT tax when it borrows money to purchase real-estate? Publication 598 applies to Non-Profit Organizations. An IRA is not a non-profit organization. Furthermore, non-profit organization's pay UBIT tax from income they derive from business activities that are not-related to their tax-exempt purpose. For example, an educational non-profit organization whos purpose is to teach English to immigrants that decides to purchases real estate for rental income would have to pay UBIT. But here we are talking about IRAs. Its not even a non-profit organization AND the purpose of an IRA is to make as much money as possible for retirement. So please tell me why everyone thinks that an IRA would have to pay UBIT when it borrows money to buy real estate. Where does the IRS state that a self-directed IRA must pay UBIT tax when it borrows money to purchase real-estate?

Publication 598 applies to Non-Profit Organizations. An IRA is not a non-profit organization.

Furthermore, non-profit organization’s pay UBIT tax from income they derive from business activities that are not-related to their tax-exempt purpose. For example, an educational non-profit organization whos purpose is to teach English to immigrants that decides to purchases real estate for rental income would have to pay UBIT.

But here we are talking about IRAs. Its not even a non-profit organization AND the purpose of an IRA is to make as much money as possible for retirement. So please tell me why everyone thinks that an IRA would have to pay UBIT when it borrows money to buy real estate.

]]> By: Home Owner Quicksand | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-192531 Home Owner Quicksand | Rain City Guide | A Seattle Real Estate Blog... Thu, 11 Oct 2007 16:38:16 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-192531 [...] The investment community is wondering what this all means. Many investors purchase homes through their retirement accounts through self directed IRA’s or other LLC’s or corporations.  Does this law mean that the LLC must be a contractor, or does it mean that the owners of the LLC must be a contractor or both.  In the case of the self-directed IRAs buying real estate, there may be prohibited transactions if either the LLC or the owner of the IRA become a contractor. [...] [...] The investment community is wondering what this all means. Many investors purchase homes through their retirement accounts through self directed IRA’s or other LLC’s or corporations.  Does this law mean that the LLC must be a contractor, or does it mean that the owners of the LLC must be a contractor or both.  In the case of the self-directed IRAs buying real estate, there may be prohibited transactions if either the LLC or the owner of the IRA become a contractor. [...]

]]> By: Jennifer D. Meacham http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-187950 Jennifer D. Meacham Tue, 02 Oct 2007 18:39:18 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-187950 Thank you Eileen. And David, I'll add your name to the list! Thank you Eileen. And David, I’ll add your name to the list!

]]> By: David Doscher http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-156049 David Doscher Tue, 03 Jul 2007 19:45:29 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-156049 I can help with non-recourse loans in Texas and purchasing Real Estate through your IRA. Please email your information to IRAagent@IRAagent.com and I will get back to you! I can help with non-recourse loans in Texas and purchasing Real Estate through your IRA. Please email your information to IRAagent@IRAagent.com and I will get back to you!

]]> By: Eileen http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-135521 Eileen Tue, 15 May 2007 17:29:49 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-135521 Seth, I emailed you the list of non-recourse lenders offsite, and now it looks like Jennifer has another list and is another source for self directed IRA information. Welcome Jennifer. I'm glad to find another site rich with information. Seth, I emailed you the list of non-recourse lenders offsite, and now it looks like Jennifer has another list and is another source for self directed IRA information. Welcome Jennifer. I’m glad to find another site rich with information.

]]> By: Jennifer D. Meacham http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-135345 Jennifer D. Meacham Tue, 15 May 2007 06:17:24 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-135345 Non-recourse lenders usually loan nationwide. You'll find a list I'm compiling at <a href="http://www.self-directed.info" rel="nofollow">Self-Directed.info</a>. I hope this helps! Non-recourse lenders usually loan nationwide. You’ll find a list I’m compiling at Self-Directed.info. I hope this helps!

]]> By: ARDELL http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-132736 ARDELL Tue, 08 May 2007 23:39:27 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-132736 We don't mean to ignore your request here on Eileen's post, but I'm not sure anyone here knows this answer. None of us work in Texas. We don’t mean to ignore your request here on Eileen’s post, but I’m not sure anyone here knows this answer. None of us work in Texas.

]]> By: Seth http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-132686 Seth Tue, 08 May 2007 19:54:03 +0000 http://raincityguide.com/2006/06/20/why-i-dont-want-to-be-young-again/#comment-132686 Who deos non-recourse loans in Texas? Who deos non-recourse loans in Texas?

]]>