Case Study: How Our Client Used her Inherited IRA to Help Purchase Real Estate to Occupy and Create Income!


Based on actual clients of Lasaii Benefits:

*Names in this case study have been changed to protect our client’s privacy.

Last month, Terri Hughes* and her husband found information in a forum on Bigger Pockets from one of our clients that had written about his successful experience of using our IRA Real Estate to Occupy program to help purchase income producing property in San Francisco. Terri was intrigued so she visited our website, completed our “10 Question” form, and scheduled a free consultation with us for the very next day.

When Terri spoke with us, she expressed her concern for the safety of her Inherited IRA funds being exposed in the stock market and how her and her family wanted to purchase a vacation home that they could enjoy themselves and use to create income when they weren’t using it. Terri was speaking our language. Our SAFE HARBOR®-Directed IRA™ (SHIRA™) program did all of that. The SHIRA™ gave her the peace of mind she was looking for and an opportunity to enjoy a vacation lifestyle for her and her family with a tax effective IRA real estate investment that enhanced her portfolio, lifestyle, market position and legacy.

Summary of IRA real estate:

Lasaii structured the SAFE HARBOR®-Directed IRA™ (SHIRA™) to achieve Terri’s goals by:

1). asset PROTECTION:

The SHIRA™ is protected from any possible downturn in the stock market, with upside interest earning potential when it does well-giving Terri the peace of mind that her money isn’t going anywhere.

2). tax benefits:

With Terri’s inherited IRA, she was legally required to take minimum distributions that she then would pay taxes on as the funds are considered income. With the SHIRA™ in place and structured to help purchase her real estate, Terri is still required to take her RMDs, but now those RMDs and their tax liability will be totally or partially eliminated because of the tax write offs associated with real estate ownership.

3). OFFER STEP UP IN BASIS FOR HEIRS:

The SHIRA™ has the benefit of step up in basis at death, therefore, Terri’s children will someday inherit the real estate at its appreciated value, with no tax consequences to them. Because Terri will have the option to file the real estate as a rental if she chooses to create income from it, she would also qualify for a 1031 exchange.

4). Qualify for DTI Ratio:

Terri was a little short on income and was faced with the reality that she may not qualify for the real estate loan. The SHIRA™ gave her that extra income needed to qualify.

5). Income Producing Real Estate that Allows for Occupancy

Last but not least, Terri was able to purchase a vacation home that she and her family could personally use and enjoy while creating income when they were not using it because with the SHIRA™ there are no prohibited transactions.

Stretch IRA no longer an option moving forward for those of you with an Inherited IRA

With the passing of the SECURE Act, you (a non-spousal beneficiary) are no longer allowed to “Stretch” out an inherited IRA over your lifetime. All non-spousal beneficiaries now have to withdrawal the entire amount of the IRA within ten years, which could amount to very large tax consequences.

The good news is:

There are now no age restrictions on how much money a year you can withdrawal from your IRA account.

So, if you have inherited an IRA and are say, thirty-two years old, you could buy a primary residence, investment property, vacation home, commercial building, land-and not have any age restrictions or penalties on the amount you can pull out of your IRA-that, together with our IRA Real Estate to Occupy program, could be the perfect solution on eliminating or minimizing your tax liability of using those funds and creating a win-win situation for you.

For those of you that are planning on leaving a larger IRA to your children or if you are someone that is going to inherit a large IRA, please check out how our program could be the solution to the tax problems you or the beneficiary could face:

Creative Financing with the SAFE HARBOR®-Directed IRA (SHIRA):

With the protection and possible interest earnings of the SHIRA™, the potential appreciation of the real estate, rental income, and the intrinsic value of occupancy, together with the tax write-offs (if you qualify); the total value and benefits of the SHIRA™ and the real estate could be, and has been, in the double digits. In other words, the perfect alternative investment.

We specialize in helping clients structure customized, tax effective IRA real estate investments that enhance their portfolios, lifestyles, market positions, and legacies.

Please share this with friends and family that could benefit from our proprietary IRA real estate structure!

Visit www.lasaiibenefits.com to sign up to receive our “Understanding the SAFE HARBOR®-Directed IRA™” Guide to learn more.