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Recessionproof, bubbleproof real estate investing with a Self-Directed IRA LLC or Solo 401k February 24, 2009

Posted by Jeff Nabers in : real estate, Self Directed IRA Solo 401k , add a comment

[youtube=http://www.youtube.com/watch?v=hyJnqiI7GG4]

So the housing market tanked. It caused many people to run away from real estate investing, but the real estate opportunities are growing. I’m not talking about the ability to buy properties for cheaply and sell them for more.

This video examines how investing for income differs from investing for gains. The two objectives carry different risks and different (more…)

Tool for Battling Coming Inflation February 19, 2009

Posted by Jeff Nabers in : Money, Personal Enjoyment, Personal Productivity, real estate, Self Directed IRA Solo 401k , add a comment

If you’ve been following my blog, you know that I take great interest in understanding money. Why every single human who uses money on a regular basis doesn’t also share this interest is beyond me.

With trillions of dollars created by actions of Congress, the Federal Reserve, and the Treasury Department, the concern for coming inflation can only spread. This video explains why tax deferred investment vehicles are the best tool for battling inflation and can possibly even (more…)

Self Directed IRA/401k vs. 1031 and other conventional RE tax strategies June 24, 2008

Posted by Jeff Nabers in : real estate, Self Directed IRA Solo 401k , 8comments

Conventional Tax Strategies for Real Estate

Many real estate investors boast of their tax strategy as involving one or more of the following:

Depreciation – This is a tax concept where the property owner pretends that his property is decreasing in value. For residential real estate, it assumes that the property’s improvements will become worthless over 27.5 years. In commercial real estate, the calculation is for 39 years. During each year of property ownership, the owner can take that year’s pro rata depreciation as if it is a loss against the income of the property… which reduces the taxable income of the property, thus reducing the amount of taxes due. Upon future sale of the property, depreciation normally must be “recaptured” which means that there is no more pretending, and the taxes on the truly realized gains must be paid anyways.

Cash out Refi – This is where the owner of the property will refinance the mortgage. The new loan will have a higher balance than the old one, resulting in “cash out”. Because this is just borrowing, it is not a taxable event. Upon future sale of the property, however, taxes will normally be due on the actual gains anyways.

1031 Exchange – Upon the sale of real property, the gains can be deferred if they are used to purchase property of “like kind” within a certain time period. It goes something like this:

    • Property B must be of equal or greater value to Property A
    • Both properties must be “like kind”. For instance if Property A was U.S. real estate, Property B must also be U.S. real estate.

    So, savvy real estate investors often (more…)