Self Directed Investor Talk: Alternative Asset Investing through Self-Directed IRA's & Solo 401k's

https://SDITalk.com/295 -- I don’t normally dive into these waters, but here we go: What is Bitcoin actually worth? I have some data-backed thinking on this you may not like, but hey… the truth is the truth. I’m Bryan Ellis. This is Episode #295 of Self-Directed Investor Talk.

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https://SDITalk.com/294 -- Hello, Self-Directed Investor Nation! Welcome to the broadcast of record for savvy self-directed investors like you, where in each episode, I help you to find, understand and profit from exceptional alternative investment opportunities.

My friends, this episode – episode #294 – is almost a part 2 follow-up to yesterday’s brilliant episode in which I shared with you exactly why it can actually REALLY MAKE SENSE to perform taxable transactions in your IRA, even though the tax rate your IRA will face – something on the order of 40% or so – is painfully high.

Now If you didn’t get to enjoy that episode, you really should do so right now, because this episode builds nicely on that one. You can get the link for that show on today’s resource page, SDITalk.com/294.

So even in the high-tax scenario I described in episode #293, that strategy still makes absolute sense. And today, I’ll make that strategy even better by slashing that tax rate in half by using a bit of tax-planning savvy.

As I do that, you’re welcomed to join the conversation by toll-free telephone at (833) SDI-TALK, by email at [email protected] or by visiting the resource page for this episode, episode #294, which is, of course, SDITalk.com/294.

Ok folks, I’ve got to warn you… or some of you, at least: If you’re one of those folks who hates Donald Trump just because he’s Donald Trump, and you give no regard to the positive economic benefits his policies bring to your financial situation, then you’re going to hate today’s show.

But if you have the ability to be smart with the hand you’re dealt, you’re going to see how to use the recent corporate tax cut to HUGE benefit in your self-directed IRA or 401(k).

So here’s the deal: When you make investments in your IRA that are considered by the IRS to be “active businesses” – like real estate flipping – then your IRA will be subject to income tax. Since your IRA is technically a trust, your IRA is taxed at trust rates… and those rates are high. For all intents and purposes, you can think 40%, and that’s before your state tacks on more.

So a clever self-directed IRA or 401k user might think… “Ok, let’s do the deal inside of the IRA using a more tax-efficient business structure.” You know, something like… let’s set up a corporation inside the IRA and use the corporation’s tax rates instead of the really high trust tax rates.

Sounds like a good idea, right?

Only problem with that is that, until the Trump tax cuts, the corporate income tax rate maxed out around 39%... basically identical to the trust tax rates. So there’d be no real tax advantage for doing your flips through a corporation in your IRA.

But this is where the new tax law can give a huge boost to your IRA. Now, corporate tax rates no longer top out at 39%, but at 21%... basically HALF of what it was before. That’s amazing… HALF!

So you might recall yesterday’s example where your IRA made $60,000 in one year by doing real estate flips, but the IRA actually lost 40% of that – $24,000 – to taxes.

Well, simply by forming a corporation in your IRA and performing the flips within the corporation instead of directly in the IRA, the max federal corporate tax rate drops to 21%, which means your IRA’s tax hit plummets to a bit over $12,000 rather than $24,000.

Yep, you heard that right… the tax cut bill that the press claimed was only for “corporate fat cats” can actually have a very substantively positive effect on your retirement savings via your self-directed IRA or 401(k)!

Think about that difference… a difference of about $12,000. Not a huge amount, but it equates to about 2 year’s worth of maxed-out annual IRA contributions for most people. And what’s more, it’s plausible to experience that kind of result each and every year, not just one time.

The difference can be HUGE.

That’s all I’ve got for you today, but…

Can I take 30 seconds and ask a favor of you? Would you be so kind as to stop by over at iTunes and give us a 5-star rating if you haven’t already? It’s actually really important because some bozo named Bill0804 gave us a bad rating just because I’m not afraid to talk about politics and how it affects your money – just like I did today – and he happens to have a different political opinion. Now let’s be clear, of the 455 ratings we already have on iTunes, 95.6% of them – 435 – are perfect 5-stars, so we’re still doing exceptionally well. But if you enjoy this show, it would be really helpful for me if you’d stop by over at iTunes and give us a great rating. Thanks so much, and one more thing to remember:

Invest wisely today, and live well forever!

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http://SDITalk.com/291

You usually think of prohibited transactions as being a risk that’s almost entirely unique to self-directed IRA’s and 401(k)’s… you usually think conventional IRA’s are largely impervious to this horrible risk that can slash half or more of the value of your account in a single instant.  You’d be wrong.  Today you learn about a policy being implemented by financial behemoths Merrill Lynch, Wells Fargo and others that, I’m confident, will result in awful prohibited transaction penalties within CONVENTIONAL IRA’s… all because of what can only be described as aggressive GREED in the financial industry.  I’m Bryan Ellis.  This is episode #291 of Self-Directed Investor Talk.

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Today I'm at the IMN Single Family Rental Investment Forum in Scottsdale, AZ.  It's an interesting group... it's something like Wall Street meets Real Estate... but a tier or two below the biggest capital players.  It's very interesting too... one thing I've noticed for sure is that panelists seem terrified of having an opinion about the Trump effect on the economy for investors.

So, as your humble host, I'll answer for them.  Enjoy!

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A Big Lesson from a Dinner with Gates & Buffett

http://SDITalk.com/289

Happy December, Self-Directed Investor Nation! Today we touch on the DANGER of creativity… the need for a clear investment plan… a famous dinner with Bill Gates and Warren Buffett… and even some blasting of, or maybe praise for Bitcoin… all culminating in the single most important factor for your success and I, Bryan Ellis, your humble host for today’s ascent into investment excellence, will share it all with you right now in Episode #289 of Self-Directed Investor Talk!

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http://SDITalk.com/288

Let’s talk about choosing a self-directed IRA custodian, shall we?  I’m Bryan Ellis.  This is episode #288 of Self-Directed Investor Talk.

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http://SDITalk.com/287

Let’s talk about choosing a self-directed IRA custodian, shall we?  I’m Bryan Ellis.  This is episode #287 of Self-Directed Investor Talk.

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http://SDITalk.com/286

An incredibly well-respected financial company is predicting a 70% probability that the stock market will experience a bit of a meltdown.  How will you prepare the conventional side of your portfolio? I’m Bryan Ellis.  This is Episode #286 of Self-Directed Investor Talk.

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