The Schill Factor - Articles <img Advice

Contact Steve!

Home
760-834-8745

Mobile
760-636-6273

Chart your financial future with Mexico as your profit vehicle
You can own real estate in your IRA...including International real estate
Derek Hadge

Use your current IRA, Keogh, or 401(k) to buy your piece of paradise and enrich your retirement years with no effort on your part

I know you’re a wise, savvy money manager. I’m also sure that almost every financial move you make is now done with an eye toward retirement. An investment like buying into Mexico is a good way to build a satisfying retirement.

Contrary to what you probably have been told by your broker or banker, you can own real estate in your IRA…including non-United States real estate.

Over the years, advisors have wrongly convinced many people they cannot own real estate in their IRA's or other retirement plans. Nothing could be further from the truth.

In fact, the rules governing the ownership of real estate this way are very simple...and under them you can own virtually any kind of real estate.

Investing in stable, low risk real estate like Mexico is as close to a “sure thing” as you can get. The property has an excellent chance to accrue value. Costs are minimal. And you can take advantage of a number of tax strategies that will maintain or even reduce your overall tax burden while earning a good return.

For instance, if you decide to sell your property and realize a capital gain on it (almost a slam dunk with Mexico), you can avoid capital gains taxes by taking advantage of the 1031 provision of the tax code. Simply roll your gain over into another international property that is more expensive than the one you have sold, and you do not have to worry about being penalized by capital gains tax!

But there’s a little known strategy that is even more enticing than the well-known 1031 provision.

If you own an IRA, Roth IRA, Keogh, or 401(k) retirement plan, you can use some (or all) of the money in that plan to buy rental property. The rental proceeds go back into your IRA, fatten your retirement, and are not taxable until you begin your statutory distributions.

You can sell the property you bought with your IRA at any time. Using this strategy, you are not required to reinvest in higher value real estate to avoid capital gains. Simply keep all the proceeds of the sale in your IRA, and you are safe. Or you can buy more property with the proceeds and keep your upward profit spiral building.

Of course, this reduces your tax burden now while building a richer, more enjoyable life when you retire. Why hasn’t your IRA administrator told you about this? Maybe he doesn’t know about it…many don’t. Or maybe he’s more concerned about selling you his company’s retirement products than giving you the complete picture.

However, if you decide to adopt this highly profitable IRA strategy, you cannot live in the property your IRA is buying. But you can visit it periodically…and stay there for a limited amount of time. How does six weeks out of the year sound to you?