Stimulate Your Retirement & Rescue Your Savings Now!
July 22nd, 2009 · 2 Comments
Tags: Alternative Investments · Finacial Advisor · IRA · LLC · PENSCO Trust Company · Retirement · Reverse Mortgages · Roth IRA · Trust deeds · baby boomers · economy · loans · mortgage · mortgages · pension plan · private equity · real estate · self-directed IRA · solo(k) · tax
2 responses so far ↓
1 Cheryl Roberts // Sep 23, 2009 at 8:13 am
I would like to know if I transfer my ira into a self-directed account do I have to buy real estate immediatley, or do I have a certain amount of time to look around for something to buy. Do I have to pay taxes on the ira money I switch over, or any penaties? I heard ira accounts can auotmatically charge you 20% for taxes coming due.
2 admin // Sep 23, 2009 at 8:54 am
No, you don’t have to buy anything until you are ready. Your cash will sit in an interest-bearing FDIC insured account until it is invested. The transfer from one institution to another of a like IRA is tax-free (e.g., IRA to IRA, Roth IRA to Roth IRA). If you take a cash distribution from a 401(k) or similar plan, the company will treat that as a distribution to you personally and withhold 20% for futue taxes, as required by law. However, you don’t need to do that if your intent is to get the money into an IRA from a plan. You can roll the money over to the IRA custodian of choice for your self-directed account. When you do that, the 401(k) plan administrator will send you a 1099 for taxes, however, provided you deposit the funds into the self-directed IRA custodian within 60 days of receipt, the new custodian files a 5498 from with the IRS that negates the tax, and thus the rollover is tax-free. Please call (866) 818-4472 to speak to one of our representatives who will walk you thorough this process quickly. Thanks for your comment. Also, visit http://www.penscotrust.com for more info.
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