Tax Return for UBIT – Does your retirement plan own leveraged real estate or an active business? April 15, 2009
Posted by Jeff Nabers in : Self Directed IRA Solo 401k , add a commentJust a quick, last-minute reminder…
- If your IRA owns mortgage-leveraged real estate, you owe UBIT.
- If your IRA or 401(k) owns an active business structured as a pass through entity (such as an LLC or partnership), you owe UBIT.
- If your 401(k) owns mortgage-leveraged real estate AND the mortgage is a “seller carry”, you owe UBIT.
UBIT, or Unrelated Business Income Tax, applies to tax exempt organizations including retirement plans. To pay UBIT, Form 990-T must be filed with the IRS. If this is all news to you, once you are done scolding yourself, you may want to file for an extension using Form 8868.
How to profit from real estate investments in a soft and declining real estate market January 21, 2009
Posted by Jeff Nabers in : Self Directed IRA Solo 401k, real estate , add a comment
Three years ago real estate investing was hot. Today, many people act as if the opportunity has passed. I contend that the opposite is true. In the past, as a mortgage banker focused on originating mortgages for investment properties, I started listening to and learning from my real estate investor clients and noticed two categories of real estate investors: real investors and blind investors.
Real Investors have the following in common:
- Profiting when they buy. Rather than believing an entire market is hot or cold, a real investor knows that the purchase price is what dictates the return on the investment. You can look in any real estate market to see property values and rental rates. Those are things the investor doesn’t control. The investor does control what he is willing to pay for a property, and that’s how a real investor knows what his return on investment will be before buying the property.
- Investing for income. Real investors buy assets because they produce income. What a property is selling for doesn’t even matter if (more…)
Who will bail out the government? October 1, 2008
Posted by Jeff Nabers in : Money, Personal Enjoyment, Self Directed IRA Solo 401k , add a comment
Although the House rejected the recent $700 billion bailout, there is plenty of bailing out that has already happened, and there is more to come. Already:
- $80 billion injected into failed AIG
- IndyMac bank taken over by FDIC
- Bank of America bought Merrill Lynch for $50 billion – 70% over its September 12 closing price
- Bear Sterns was bought by JP Morgan Chase for $1.2 billion and the Fed then loaned JP Morgan Chase $29 billion (without recourse) to ensure that JP Morgan Chase didn’t actually have to suffer the consequences of buying a failed bank
- Washington Mutual failed – it is the largest bank failure in American history. In 2007, its share price was $45. By the time it was sold to JP Morgan Chase, it’s share price was 16 cents. The CEO stepped down on September 8, 2008 and a new CEO received a $7.5 million sign-on bonus. 17 days later, he received an $11.6 million severance package as WAMU filed for bankruptcy.
- Bank of America has become the nation’s largest mortgage lender by purchasing Countrywide & Interfirst
Hundreds of billions of dollars have already been injected into the system as seen on this timeline. It’s been happening every couple of months – 5, 10, or 20 billion dollars at a time. That kind of help hasn’t helped enough, and the $700 billion bailout is a sign that zeros will soon be added to the bailouts, and they will total in the trillions of dollars.
What happens to a company that gets bailed out?
- It becomes either under the control of whoever provided the money; and/or
- It becomes indebted to whoever provided the money.
How will our government pay for this?
Firstly, it’s important to understand that (more…)
Is this the bottom? How to recover your stock market losses September 30, 2008
Posted by Jeff Nabers in : Money, Self Directed IRA Solo 401k , add a comment
This question is on the minds of millions of Americans. I know exactly how to recover your losses: get out of the U.S. stock market and recoup your losses elsewhere.
S&P 500 loses 28% in one year
The sales pitch of securities salesman is that the stock market goes up around 8% or 9% per year over the long run – so don’t ever sell as a reaction to losing money. Let’s examine this, and assume your investment performance equaled the S&P 500 (even though the majority of mutual funds’ performance is inferior to that of the S&P 500).
Scenario A – You entered the (more…)



