Arn Cenedella

Additional opportunity to use Retirement Funds to buy real estate

I have written on several occasions about the ability to use retirement funds to purchase real estate.

There is a window of opportunity to convert IRA funds into Roth IRA funds and spread the tax impact out over two years.

As you probably know,  for “regular” IRAs, before-tax funds are placed in an IRA where it grows tax free until the funds are withdrawn and taxed at withdrawal.  In a Roth IRA, “after” tax funds are placed in a Roth IRA and they grow tax free and are TAX-FREE upon withdrawal.

The general theory on IRAs is to put money in and then withdraw after retirement when theorectically your tax bracket will be lower. Of course, with all our government borrowing and defecit spending, who knows tax rates may be higher 10 to 20 years from now than they are today.

Currently, most individuals due to a new law are able to convert IRA funds to ROTH IRA funds and pay the tax due on said conversion over a 2 year period.

Of course, everyone needs to check with their own tax advisor before making any decisions. Tax law is complicated and beyond my expertise but I know enough to suggest that this is an option you may want to consider.

Jeff Brown provides additonal information on this concept.

I have helped several clients purchase investment property with retirement funds, let me help you too!

This entry was posted on Monday, March 1st, 2010 at 12:21 pm and is filed under Helpful Sites, Investment Real Estate, Pending Legislation, Use retirement funds to buy real estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Name (required)

Email (will not be published) (required)

Website