You want IRA experts on your team when you’re planning your retirement. In this episode of our popular blogcast series, David Moore explains why the folks at Equity Advantage are experts in what can and cannot be done with IRA investments.
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Today we’re talking with David Moore, co-founder of IRA Advantage, a firm that specializes in truly self-directed retirement accounts.
David, what makes IRA Advantage true IRA experts?
David Moore: Well most of the time when you’re talking about someone who would call themselves an IRA expert, and I always hate to sort of toot my own horn too much, some of my buddies give me a hard time, I need to do it more often, but the bottom line is: typically people are talking about investments and when it comes to the guidelines, the defining factors of what an IRA can and can’t do, there is lots of gray area out there and very, very little information out there, lots of misinformation out there. And an example might be, if you googled “Can I buy a retirement home with an IRA?”… And the answer’s going to come back, “No you can’t” and that answer’s totally wrong, and my father always used to say, “It’s amazing when you know something, that while you’re reading about how often it’s wrong.”
That’s just one example, so if let me clarify what I meant by that retirement house situation, we’re going to tell you that you can’t use that home while it’s inside the IRA, but you can certainly use the IRA to buy the home and then you would wait until the home’s been taken out fully as a distribution before you could then use it personally. But to say flat out you can’t do that, that’s totally incorrect. So that’s just one example of a situation where we provide an opportunity or solution to someone’s situation where they’ve been told they could not.
So there are some lesser known aspects of IRAs out there?
David Moore: Certainly, certainly, in one of our earlier blogcasts we talked about converting IRAs into a 401K plan to go do a what’s called a rollover business startup. Another situation that comes up often is people will say, “Well gee, I talked to my financial adviser and they told me I should not go out buy real estate with my IRA because it’s not liquid. When I get to a point where I’ve got to take a required minimum distribution, what am I going to do if I have no money to take that distribution? I’m going to have penalties.” Well a simple solution to that is just to take an in-kind distribution, so as I said earlier, you can buy that retirement home and you can just take the home as a distribution, that’s an in-kind distribution.
Well in-kind distributions are something that typically are not looked at, but when we’re talking about self-directed IRAs, and notes and real estate, and maybe precious metals, there’s many opportunities there as there’s situations where the tax-payer would like to take an in-kind distribution, and there’s really that the in-kind distribution provides several opportunities. One, you know the valuation of this thing, what is something worth? My youngest brother’s an MAI appraiser, that’s the top of the heap in the appraisal world, and if I ask him, “Well how do you know whether you’ve done the right job?” And he says, “Well, pretty easy. Nobody’s too happy or too mad.”
So when you would look at an in-kind distribution, you’ve got that value, that’s one issue. The other issue that people aren’t aware of quite often, is when you’re taking a portion of something, you can discount that portion. If you don’t have a controlling interest in something, you can discount what that valuation is. Possibly up to 40%. So we’re going to provide the opportunities, the solutions, we’re just going to arm our tax-payer with the information. They’re going to their tax and legal people, and if everyone likes it, they’re going to move forward with these things. If they don’t like it, then they won’t. But our position is simply to provide that information. We’re not going to give them tax or legal advice, and we don’t offer investments nor investment advice. We simply provide the investment vehicle that allows our client to go make the investment that they would like to make.
Thank you David. Listeners may call (503)619-0223, or can visit IRA Advantage for more information.
You really can’t afford to deal with less than IRA experts when planning for your retirement: it’s just too important, and the laws covering IRAs can very complex. Put David and the entire team of professionals at Equity Advantage on your side today. Call to get started!