Key Tips for investing In Real Estate Using Retirement Funds (IRA, 401K)

​Using retirement funds to invest in real estate offer retirement account holders several positive financial and tax benefits: 1) understanding of the asset and business model, 2) diversification, 3)  inflation hedge, and 4) the ability to generate tax-deferred or tax-free (in the case of a Roth) income or gains.
 
For example, if a person acquired a piece of property with retirement funds for $100,000 and later sold the property for $200,000, the $100,000 of gain appreciation would generally be tax-deferred. Whereas, in the case of personal funds (non-retirement funds), the gain would be subject to federal income tax and in most cases state income tax.
 
However, most people mistakenly believe that their retirement accounts must be invested in traditional financial related investments such as stocks, mutual funds, exchange traded funds, etc. Few Investors realize that the Internal Revenue Service (“IRS”) permits retirement accounts, such as an Self-directed IRA or 401(k) plan, to invest in real estate and other alternative types of investments.  If your employer 401(k) plans do not offer real estate as a plan investment option, establishing a self-directed IRA is quick and relatively inexpensive.
 
The most challenging aspect of investing in real estate using retirement funds is navigating the IRS prohibited transaction rules (Internal Revenue Code Section 4975) that prevent the retirement account holder from making investment that will directly or indirectly benefit ones self or any disqualified person. 
 
In order to comply with regulations and understand what instruments are suitable, you should always consult with a tax professional for further guidance and have a paid custodian to keep track of and reports to the IRS on deposits, withdrawals, and year-end balances related to your investments. 


Houston Equity Partners Offering approved for IRA (401k, etc.) Investing
We are glad to inform that it is now possible to invest Retirement/IRA (401k, etc.) money directly into Houston Equity Partners - Round III. 
 
Madison Trust Company (www.madisontrust.com) - who specializes in Private Investments and Non-publicly-traded funds- has approved the offering as a qualified Alternative Investment. 
 
The process is simple:
1)  Madison opens a new (Self-Directed) IRA for you.
2)  Madison helps you transfer – all or A portion of – your existing retirement money to your new IRA.
3) Madison invests your new IRA directly into our Fund.

The fees would be as follows:

1. $100 to set up the account & Invest the funds
2. $49 a quarter to maintain (in 2019 the quarterly fee will be $52)

To learn more, please contact Seth Bergida, Account Specialist working with HEP:

• Seth Barged
• Direct extension:(845)947-1010  
• Email: sbergida@madisontrust.com
• www.madisontrust.com

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