Advanta IRA Trust – Real Estate IRAs

There was an interesting article in today’s Wall Street Journal that detailed Presidental hopeful Mitt Romney’s IRA and what he owns in it.  Low and behold Mitt has a self-directed IRA.  Mitt holds several private and alternative investments.  Most notably in his portfolio is a Bain Capital shares or membership interest.

Mr. Romney has a excellent tax planning team that has layered his investments for liability protection and tax sheltering.  The article was correct on many key facts.  The article pointed out the IRAs that own businesses are subject to UBIT tax.  They were not sure if Mr. Romney was paying UBIT becasue of the offshore corporation that was set up for asset protection. I would assume he is not paying UBIT because that is the way the law does not require if if you own an offshore corporation. Read the rest of this entry »

The old saying goes opportunity is the mother of invention, and it definitely holds true for investors in today’s economy .  The bank’s pain can be an investor’s gain. We have seen many IRA investors purchase bank foreclosures or REOs, but there is another opportunity with a large upside available to investors.

Many banks have decided not to hold their troubled debt properties to foreclosure, and have opted to instead sell the note and mortgage as an asset.  These troubled debts are usually sold at a deep discount, offering the investor great opportunities.  Different scenarios for the investor include restructuring the debt with the borrower, or holding the note to complete the foreclosure process.  While this investment strategy is not for the new investor,  it can be a smart move if you get professional due diligence on the asset. Read the rest of this entry »

How many times have you heard it said we live in the greatest country in the world?  We have running water in every building, store shelves are stuffed to the hilt, and pretty much the best health care in the world. We are not perfect, but we have it pretty good.

Today, we had one of the largest drops in stock market history. For retirees and soon to be retired, this is their worst nightmare.  The last five years have been a disaster that continues to have no resolution in sight. Who would have ever believed it would come to this?  I heard CNN blame Europe for much of our economic problems the last week, but our own house is a mess, and there is no leadership in sight from either party. Read the rest of this entry »

We are often asked if a client who is doing an exchange can offer seller financing to the buyer, and still take advantage of the benefits of doing a 1031 exchange. 

Should you decide to do seller financing with your relinquished property, it is important to note that the loan must be paid off prior to closing on the purchase of the replacement property(s).  The Qualified Intermediary would be listed as the Lender.  Any payments made would be made payable directly to the QI and sent to them to deposit into the escrow account that they have established for your exchange.

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On many occasions, I have been contacted by a client who wants to purchase a future home with their IRA.   Many have the misconception that once they turn 59.5 years old, they can live in the home.   It is possible to purchase a home with your IRA and eventually live in that home, but it is not as simple as just reaching an age milestone.  

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Energy demands and rising commodity prices continue to dominate our economy.  The opportunity is there for your IRA to invest in energy resources.  Investors can take advantage of this opportunity by in investing their retirement fund in non-traditional assets via their self-directed IRA.

For over a Century, Americans have been involved in investing in energy.  There are two primary investments purchased in IRAs – mineral right deeds and LLCs that invest in energy products (wells, technology or exploration).  There is an opportunity for tremendous growth in these industries.  The IRA offers the opportunity of tax free growth on investment profits. Read the rest of this entry »

Under the current law, a reverse 1031 exchange can be accomplished by following Revenue Procedure 2000-37.  Under this technique, the Exchangor or Client typically purchases their replacement property before they have secured a buyer for their exiting property, and parks title to the replacement property with an Exchange Accommodation Titleholder (EAT).  Most Qualified Intermediaries also act as Exchange Accommodation Titleholders.

This technique is very common, and used by a number of real estate investors.  The three common errors to note are: How will the client pay for the replacement property? Can the client close on the sale of their relinquished property 180 days from the date the new replacement property is purchased? Has the client priced the relinquished property to sell?  There is no recourse if the client does not sell their relinquished property in 180 days.  At that point the EAT would have to return the replacement property to the client.

 Does this sound confusing?  Well, it is, but a qualified exchange company should be able to handle the transaction with very little problem.

 One issue that a slow real estate market can cause in a reverse exchange is the relinquished property does not sell within the 180 days.  Recently, the IRS released a private letter ruling regarding a technique that could help a failing reverse exchange where the relinquished property has not sold by the 180^th day.

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IRA Contribution FAQs

Contribution limits change from year to year and it’s important to keep track of the rules whether you have an IRA or are looking to open one. We’ve provided a simple FAQ to help you understand and manage annual contributions to your IRA.

• What is an IRA contribution?
  An IRA contribution is the deposit of personal funds into your IRA. You can make contributions in the form of a check, wire, or ACH (direct deposit). The IRS limits the dollar amount that you can contribute to your IRA each year, and this amount varies based on the type of plan you have. Click Here for 2010 and 2011 Contribution Limits
• When are my contributions due?
  Contributions must be postmarked on or before April 15 to count towards the previous year’s taxes. However, this year contributions must be postmarked on or before April 18, 2011 due to Washington D.C.’s observance of Emancipation Day.
• Can I file for an extension?
  Tax-filing extensions do not apply to your IRA, which means that your contributions must be deposited on or before April 18th, 2011.

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In our changing economic times, it is more important than ever to focus on our retirement planning and financial futures.  For most of us, we have never seen the wild ride that the financial markets have shown us the last few years.  Just as we check our calories, blood pressure and weight on a regular basis, how are we doing with our finances?   It may be time for a routine check-up.

Studies have shown us the average American spends more time annually on vacation planning than on financial planning.  There was also a survey by Aetna claiming 31 percent of pre-retirees would rather clean their bathroom or pay bills than plan for retirement.  Allstate used to have an ad that claimed last year Americans spent 19 hours planning for their retirement. That’s about the same amount of time they spent planning their Thanksgiving dinner. 

So how do we get started and what are our choices today?  Unfortunately, retirement planning is not something the faint of heart can jump right into, but it can be done and with a little practice, it does get easier.  Here are some tips:

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Whenever I tell someone that we are a Qualified Intermediary for 1031 Exchanges, I almost always get the response “1031?!  Are people still doing those?  I didn’t think those were still being done in this economy.” 

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