Would You Rather-Roth IRA or Income Producing Real Estate?


I’m sure your son or daughter, or maybe grandchildren, have asked you some silly question at one point or another that starts with, “Would you rather?”  You know-would you rather eat a can of worms one time or eat the same thing every day for the rest of your life? Or-would you rather swim with sharks for an hour or walk through the NYC subway barefoot for a month?

We’ve got a “Would you Rather,” question for you as well! But first, we must set the scene!

Let’s say you inherit an IRA for $2,000,000 from a non-spousal loved one.  In the past, you would probably just set up a Stretch IRA and receive payments based on your age that are stretched out over your lifetime in order to minimize the tax liability of using those funds. As you may know, because of the SECURE Act that was recently passed, this Stretch IRA is no longer a valid option.  Now you would have to use up that two million dollars within ten years.  The tax consequences of this would be daunting, with an extra $200,000 of income that you would need to claim and pay taxes on each year.

So, WOULD YOU RATHER?

Take that two million dollar inherited IRA and convert it into a Roth IRA so that one day you will have access to tax-free income.  Before that happens though, you or the person leaving you the IRA, must pay $800,000 OUT OF POCKET to make the conversion. That’s $800,000 lost-gone forever.

OR…

Take $400,000 out of pocket for a down payment and use your inherited IRA to purchase income producing property to occupy such as:

  • Commercial Real Estate-you or your daughter can occupy one of the offices and rent out the rest to create income

  • Multi Family Rental-you or your mom can occupy one of the units and rent out the rest to create income

  • Vacation home- you and your family can enjoy and rent out when you’re not using it-maybe even retire there someday!

  • Or all of the above-depending on the price of the real estate, you could use your inherited IRA to purchase multiple income producing properties.

By using your IRA to help purchase the real estate, you would be able to totally eliminate or minimize the tax liability of using those IRA funds (income).

On top of the tax advantages and intrinsic value of occupancy that our SAFE HARBOR®-Directed IRA™ offers, some of the other benefits include:

-Asset Protection

-Protected Leverage

-Rental Income-that goes directly to your pocket

-Possible Appreciation of real estate

-Step up in Basis at death for your Heirs

So, WHAT WOULD YOU RATHER DO? We would love to hear!  Comment below or play the game here:

If you have a large inherited IRA and are interested in what our proprietary SAFE HARBOR®-Directed IRA™ can do, please fill out our “10 Question Form” to see if you qualify here:

We offer free consultations with the completion of the “10 Question Form,” and look forward to helping you reach your real estate goals!

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Lasaii Benefits believes in sharing financial knowledge, working hard for their clients, and practicing ethics in life and in business.

We specialize in helping clients structure customized, tax effective IRA Real Estate to Occupy investments that enhance their portfolios, lifestyles, market positions, and legacies.

Since 1992, Lasaii Benefits have been the leading experts in the IRA Real Estate to Occupy Industry.

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