Case Outline: Mr. Connor responded to an advertisement he saw in an airline magazine while on a business trip. Having accepted a promotion, Mr. Connor was to be transferred to a different location within his home state which would necessitate a change of residence for him and his family. Finding themselves in a buyer’s market was beneficial to the Connor’s for their new purchase, but presented a challenge to them in selling their existing primary residence. Ideally, the Connors preferred to be able to hold onto their existing primary residence and convert it to a rental property. However, their income fell short of qualifying for a new home mortgage while still maintain their current home mortgage, even when taking into account the anticipated rental income. Applying part of their retirement monies to the new purchase could be the solution they had been looking for. The Connor’s scheduled a phone consultation with us to explore how our IRA Real Estate to Occupy Investing structure could work for them.
Summary: A total IRA transfer of $200,000 established a SAFE HARBOR®-Directed IRA™ (SHIRA™) account as the foundation for the Connor’s IRA Real Estate plan. We then structured the IRA to make contributing payments for the purchase of their new home, in coordination with a new primary home mortgage and using non IRA monies for the down payment. The Connors would now benefit from all associated rental real estate tax offsets for their former primary residence as well as all allowable tax offsets for their new primary residence, which would more than offset the minimal tax liability they would incur from using their SHIRA™ to help pay for their new home investment. The Connors believed the tax benefits from from owning rental real estate as well as the potential of capital gain in their former primary residence over a five to ten year period made for a very smart and sound investment.
Other estate planning benefits are derived from our OUTSIDE™ structure.
We help people multiply their IRA funds by directing them to purchase real estate that they can personally use or create an additional income from, so that they can have more flexibility in their retirement, as well as create certainty and security for their families and leave a larger and more impactful legacy.
ONE LAST THING.
With the extreme volatility the market has been experiencing the last few months, not a single client of ours has incurred a loss of value to their SHIRA™.
In fact, according to a report from Zillow, real estate increased in value an average 5.46% in 2019 nationwide, along with the asset protection of their SHIRA™, possible rental income, tax benefits, and the intrinsic value of occupancy of the property, our clients enjoy confidence, peace of mind and growth with their SAFE HARBOR®-Directed IRA™ (SHIRA™) real estate investment and its bottom line.