Look at Our Featured Homes
Find Bradenton Homes for Sale
Bradenton Buyer Guide
Bradenton Seller Guide
Real Estate Investing Tips
Bradenton Real Estate News
Meet the Team and learn about our Highest Rated Service
Information about the Bradenton Area
Bradenton Real Estate Home
Contact us


Name:
E-Mail:

Phone:

Comments and Questions:

  Real Estate in Your IRA - Tax Benefits

The Florida real estate market is exploding, which means that some of you are making hefty profits. Unfortunately, profit creates what I consider a "high quality problem".. taxes!

Here are few tips about how you can shelter some of these profits:


A lot of people lessen the importance taxes have on real estate profits due to the reduced tax rate given to long-term capital gains, but that is only part of the story. If you purchase and sell a property within a twelve-month time period, you will have to pay taxes on profits at levels as high as 35%. Ouch - 35% of your return on investment could disappear!

What can you do to eliminate this tax burden?

How about making your investments inside a taxexempt trust? In particular, a trust that most of us refer to as an Individual Retirement Account, or IRA.

The most common misconception about IRAs is that they are just a different type of brokerage account, limited to investments in stocks, mutual funds, bonds, annuities, etc. That is simply not true. By definition, an "individual retirement account means a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries." My intention is not to bore you with IRS codes or technical jargon, but to leave you with a clear and simple message. An IRA is merely a trust that, when created properly, can be used to accumulate wealth for retirement.

Let's walk through a simple example: You have $150,000 inside your IRA account, and you're sick and tired of losing money in the stock market. You decide to open a self-directed IRA and choose to have your IRA invest in a land deal in Coolidge, Arizona. Eight months go by and you find a buyer for your parcel for $225,000. Your IRA sells the property and creates a $75,000 profit on the investment.

How much do you have to pay Uncle Sam in taxes on the $75,000 profit within your account? Zero, zilch, nada, nothing!

You also do not have to worry about doing a 1031 exchange since your IRA is already a tax-exempt entity. Exciting? I tend to think so.

The above example provides a very basic understanding of the power and flexibility your IRA account can have if it is truly self-directed. In future articles, we will be delving into all the fine details, as well as other examples on how you can begin to self-direct your future by making investments in real estate!

(The above article was adapted from an article written by J.P. Dahdah, President of Entrust Arizona)



Ready to sell your home?
Contact us and we'll get you started today.
Home View Homes Search Homes Buy A Home Sell A Home
For Millionaires Newsletter About Us Contact Us Area Info

Privacy Policy:
All information you share with us is kept strictly confidential and is never shared with anyone else. This includes your contact information including name, address, phone, and email address. We will only contact you regarding information you have requested from us. You may ask to have your contact information deleted at any time by using the "contact us" button on our website. Thank you.

Copyright © 2002-2016 Avery Realty Team

 

 

 

 

Avery Realty Team provides the highest rated full service in real estate services for Florida, Bradenton, Bradenton Florida, Bradenton Florida Real Estate, Bradenton FL real estate, Bradenton Real Estate, Bradenton Beach, Bradenton real estate for sale, Realtor Bradenton, Bradenton Realtor, Sarasota, Sarasota Florida, Sarasota Real Estate, Sarasota Florida Real Estate, Sarasota FL real estate, Sarasota, Lakewood Ranch, Palmetto, Palmetto Florida, Ellenton, Ellenton Florida, Manatee County, Manatee County Florida, Manatee County Florida real estate, Sarasota County, Sarasota County Florida, Sarasota County Florida real estate, real estate investing, MLS Bradenton Florida, Bradenton Homes, Sarasota Homes, Sarasota Properties, Sarasota Realtor, Sarasota MLS, MLS Sarasota, Sarasota Realtor, Lakewood Ranch Country Club, The Concession, real estate investing, real estate investment, real estate investing in Bradenton Florida, real estate investing in Sarasota Florida, new homes in Bradenton Florida, new homes in Sarasota, Florida.