Aug 23

Can You Use a 401(k) to Invest in a New or Existing Business?

If structured correctly, you may use your 401(k) plan funds to invest in a business. IRA Financial Group’s in-house retirement tax professionals have spent the last two years developing an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax free! Unlike our competitors who have been offering this type of structure for many years, the IRA Financial Group has patiently waited for clear IRS guidance in order to develop a structure that would be fully compliant with IRS and ERISA rules and procedures.

Can You Use a 401(k) to Invest in a New or Existing Business?

The Business Acquisition Compliance and Support Structure (“BACSS”) was designed as an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax free! The Internal Revenue Code and ERISA law firmly establishes that the use of retirement funds to purchase stock of a sponsoring company is permitted as long as certain IRS and ERISA rules are followed. Based on IRS guidance, it is important that a qualified retirement plan be adopted by the new company and that it be used and operated as such.  It is also required that the value of the stock being purchased by the new Plan be valued by an independent appraisal and that the qualified retirement plan be made available to all eligible company’s employees.  Because the IRS has stressed the importance of compliance, it is crucial to work with a company that is operated by a team of in-house tax and ERISA professionals who have worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP, to ensure the legality of the structure.

Please contact one of our Retirement Experts at 800-472-0646 for more information.

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Aug 22

Individual 401k and the UBTI Rules

One of the advantages of using retirement funds, such as a 401(k), Individual 401K or an IRA to make investments, is that in most cases all income and gains from the investment will flow back to the Solo 401K tax-free. This is because a 401(k) is exempt from tax pursuant to Internal Revenue Code 401 and Section 512 of the Internal Revenue Codes exempt most forms of investment income generated by a 401(k) and a Solo 401K from taxation. Some examples of exempt type of income include: interest from loans, dividends, annuities, royalties, most rentals from real estate, and gains/losses from the sale of real estate.

Individual 401k and the UBTI RulesHowever, the IRS enacted a set of rules in the 1950s in order to prevent charities and later 401(k) and IRAs from engaging in an active trade or business and, thus, having an unfair advantage because of their tax-exempt status. These rules can be found under Internal Revenue Code Sections 511-514 and have become known as the Unrelated Business Taxable Income rules or UBTI or UBIT. If the UBTI rules are triggered, the income generated from that activities will generally be subject to close to a 40% tax for 2016. Of note, a 401(k) or Solo 401K investing in an active trade or business using a C Corporation will not trigger the UBTI tax.

The UBTI generally applies to the taxable income of “any unrelated trade or business…regularly carried on” by an organization subject to the tax. The regulations separately treat three aspects of the quoted words—“trade or business,” “regularly carried on,” and “unrelated.”

Trade or Business: In defining “unrelated trade or business,” the regulations start with the concept of “trade or business” as used by Internal Revenue Code Section 162, which allows deductions for expenses paid or incurred “in carrying on any trade or business.”

Regularly Carried On: The UBIT only applies to income of an unrelated trade or business that is “regularly carried on” by an organization. Whether a trade or business is regularly carried on is determined in light of the underlying objective to reach activities competitive with taxable businesses. Short-term activities are exempted if comparable commercial activities of private enterprises are usually conducted on a year-round basis.

Before it can be determined whether an activity is seasonal or intermittent, the relevant activity must be identified and quantified, a step that is often troublesome.

Interestingly, unlike an IRA, using nonrecourse financing to purchase real estate will not trigger the UBIT/UBTI tax since it will not be treated as Unrelated Debt Financed Income (exception exists for 401(k) qualified retirement plans but not IRAs under Internal Revenue Code Section 514(c)(9).

The type of income that generally could subject a 401(k) or Solo 401K to UBIT or UBTI is income generated from the following sources:

  • Income from the operations of an active trade or business through a passsthrough entity (i.e. LLC or partnership). For example, a store, restaurant, manufacturing business, real estate development company.
  • Using margin on a stock purchase.

For more information, please contact an IRA Financial Group 401(k) Expert @ 800.472.0646.

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Aug 16

New Podcast – My Opinion – Cutting Personal Income Tax Rates, Not Business Taxes, Will Make America Great

IRA Financial Group’s Adam Bergman discusses the idea that what the U.S. economy needs is a reduction in personal income tax rates to help out small business owners.

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Click Here to Listen

 

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Aug 15

What Are the Tax Filing Requirements for Unrelated Business Taxable Income?

In computing UBTI, a specific deduction of $1,000 is permitted. If a Solo 401(k) Plan has gross UBTI of $1,000 or more during its fiscal year, it must file a completed IRS Form 990-T to report such income and pay any tax due. The Form 990-T is due at the same time as the Form 990, however, if the Solo 401(k) Plan expects its annual UBTI (after certain adjustments) to be $500 or more, then it must make estimated tax payments throughout the year. The Form 990-T is not subject to public disclosure like the Form 990.

What Are the Tax Filing Requirements for Unrelated Business Taxable Income?

Please contact one of our 401(k) Experts at 800-472-0646 for more information.

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Aug 12

Millennials and Solo 401(k) Plans

Here’s an article from Rebecca Lake at USNews.com touting the advantages for Millennials to grow their business an retirement by utilizing a Solo 401(k) Plan:

In the world of millennial entrepreneurs, Mark Zuckerberg is the unofficial gold standard for achievement. At the tender age of 32, he’s leveraged Facebook’s (FB) popularity to amass a net worth of more than $35 billion. That’s pretty impressive for a company that got its start in a dorm room.

While Zuckerberg is certainly one of the best known millennial CEOs, plenty of other young adults share a similar ambition to succeed as entrepreneurs. An October 2014 survey from Bentley University revealed that 66 percent of millennials say they’d like to start their own business.

According to the 2016 BNP Paribas Global Entrepreneur Report, so-called “millennipreneurs” have started an average 7.7 businesses, and collectively they hold $5.6 billion in investable wealth. When the profits start rolling in, the big question for these burgeoning business owners is what to do with it. Stuffing it under the mattress is one option but a Solo 401(k) account holds a lot more appeal.

Solo 401(k)s are designed for sole proprietors who are running a business single-handedly and from a wealth perspective, they make a lot of sense for millennial entrepreneurs. Here’s a look at why it’s worth considering if you’re focused on growing your business and your retirement portfolio at the same time.

Higher contribution limits mean more investing power. If your goal is to bank as much of your entrepreneurial wealth as possible, a Solo 401(k) has the edge over other self-employed retirement plans.

Robert Farrington, founder of TheCollegeInvestor.com, uses a Simplified Employee Pension IRA to illustrate how much more a Solo 401(k) can allow you to save.

“While both a Solo 401(k) and a SEP allow you to contribute the same amount for profit-sharing (i.e., the portion of your business’s net profit), the Solo 401(k) also allows you to make an employee contribution,” Farrington says.

That’s where the Solo 401(k) sets itself apart. He gives an example of a millennial entrepreneur with a net business income of $100,000. With the SEP IRA you could contribute $18,587 a year, while in a Solo 401(k), the business would contribute that amount but you could also elect to contribute another $18,000 as an employee. That brings the total annual contribution to $36,587.

That can make a substantial difference in how much wealth a 20- or 30-something could accumulate over time. An annual investment of $18,587 would grow to $1.47 million over 30 years, assuming a 6 percent annual return. A millennial entrepreneur who’s investing $36,587 over that same period with the same annual return, on the other hand, would see their nest egg increase to $2.89 million.

A Solo 401(k) offers a sizable tax break. Besides being able to contribute more to a Solo 401(K), these plans can create some insulation for millennial entrepreneurs who are worried about getting hit with a big tax bill.

Sterling Neblett, a certified financial planner and founding partner of Centurion Wealth Management in McLean, Virginia, says that the tax benefits associated with a Solo 401(k) are significant.

“Let’s say you’re a 33-year-old, self-employed individual with $200,000 in net earnings. Assuming that you fall into the 33 percent federal income tax bracket and a 5.75 percent tax bracket at the state level, you could potentially save up to $20,537 a year in taxes by maxing out a Solo 401(k),” Neblett says.

By comparison, Neblett points out that contributing to a SEP IRA would reduce the tax savings to $14,723 while it drops even further to $6,987 for entrepreneurs who save in a SIMPLE IRA, assuming they’re making the maximum contribution to either plan.

The Solo 401(k) emerges as the clear winner on the tax front. For a millennial entrepreneur who’s focused on growing an existing business or starting a new one, having an extra $20,000 a year to work with can be extremely advantageous.

You’ve got the ability to borrow if you need it. Running a business requires a steady cash flow and if you need money quickly, a Solo 401(k) is an asset you can tap in a pinch. That can be invaluable, says Wayne Bland, a retirement consultant with Metro Retirement Plan Advisors in Charlotte, North Carolina.

“As a small business owner, it’s not uncommon to face a downturn in your business cycle that presents a challenge to your cash flow. While I strongly discourage borrowing from a 401(k) if at all possible, a Solo 401(k) loan is an option you simply don’t have with a SEP or SIMPLE IRA,” Bland says.

“If there are no other funding sources available, you could borrow up to 50 percent of your vested balance or $50,000, whichever is less,” he says. “The loan provision can literally keep the doors of your business open in hard times.”

Do your research before jumping in. Like any qualified retirement plan, a Solo 401(k) does have guidelines that millennial investors need to be aware of. Farrington advises young entrepreneurs to understand the contribution rules.

“One of the biggest hidden pitfalls of a Solo 401(k) is that you can’t contribute more than $18,000 per year yourself and total contributions are limited to $53,000,” Farrington says. “You’d have to do the math each year to ensure that you don’t exceed the contribution limits.”

Making contributions over the allowed limit can trigger a hefty tax penalty that could eat into your bottom line. That’s the last thing you can afford when you’re building personal wealth.

You also need to keep an eye on the calendar, Farrington says. The deadline for opening a Solo 401(k) is Dec. 31 and that’s the cutoff for making employee contributions. You’d have until you file your taxes to make the employer contribution.

Excessive fees are another thing to watch out for, says Scott Patterson, a certified financial planner with Core Financial Resources in Anderson, South Carolina.

“The good thing is that Solo 401(k)s don’t have to be expensive. Many brokerages will file the annual tax return and handle the administrative work very inexpensively,” Patterson says.

Even more importantly, he cautions, millennial entrepreneurs should be mindful of what a particular Solo 401(k) plan offers in terms of investments.

“Make sure you have access to the kind of investments you’re comfortable with,” Patterson says. “Don’t settle for a cheap broker with bad options.”

For more information, or to open your own Solo 401(k) Plan, please contact the IRA Financial Group @ 800.472.0646.

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Aug 09

How to Take a Loan from Your Self Directed 401k Plan

As long as the plan documents allow for it & the proper loan documents are prepared and executed, a participant loan can be made for any reason. The solo 401k loan is received tax free and penalty free. There are no penalties or taxes due provided loan payments are paid on time. The IRA Financial Group Solo 401(k) Plan documents will allow you to use a loan from your Solo 401(k) for any investment purposes, including real estate, funding your business or a new business, tax liens, private placements, etc.

What is a Solo 401(k) Plan Loan?

A Solo 401(k) loan is permitted at any time using the accumulated balance of the Solo 401(k) as collateral for the loan. A Solo 401(k) participant can borrow up to $50,000 or 50% of their account value – whichever is less. This loan has to be repaid over an amortization schedule of 5 years or less with payment frequency no greater than quarterly. The interest rate must be set at a reasonable rate of interest, generally interpreted as prime rate as per the Wall Street Journal. As of 8/01/16 prime rate is 3.50%, which means participant loans may be set at a very reasonable Interest rate. The Interest rate is fixed based on the prime rate at the time of the loan application.

How Can This be Done?

How to Take a Loan from Your Self Directed 401k PlanInternal Revenue Code Section 72(p) and the 2001 EGGTRA rules allow a Solo 401(k) Plan participant to borrow money from the plan tax-free and without penalty. As long as the plan documents allow for it and the proper loan documents are prepared and executed, a participant loan can be made for any reason. The solo 401(k) loan is received tax-free and penalty-free. There are no penalties or taxes due provided loan payments are paid on time. The IRA Financial Group Solo 401(k) Plan documents will allow you to use a loan from your Solo 401(k) for any investment purposes, including real estate, funding your business or a new business, tax liens, private placements, etc. Our in-house retirement tax professionals will assist you in completing the Solo 401(k) Plan documents in a timely manner once your Solo 401(k) Plan has been adopted.

When can a Participant Loan be Useful?

As a result of the recent economic meltdown, banks and other financial institutions have severely limited their lending capacity to self-employed business owners, thus, causing grave financial pressure on self-employed business owners. The Solo 401(k) plan is a perfect structure for any self-employed business owner seeking immediate funds for their business or to help pay personal expenses. Solo 401(k) participants can borrow up to $50,000 or 50% of their account value, whichever is less, to help finance or operate their business. For example, an individual can take a Solo 401(k) Plan loan and use those funds to pay off a mortgage, credit card, any personal expense, go on vacation, or start and finance a business.

Please contact one of our 401(k) Experts at 800-472-0646 for more information.

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Aug 04

Roth Option in a Self-Directed 401(k) Plan

The Roth Solo 401K Plan is the ultimate tax-free retirement solution for the self-employed. With federal and state income tax rates expected to increase in the future, gaining the ability to generate tax-free returns from your retirement investments when you retire is the last surviving legal tax shelter. With a Roth Solo 401K you can make almost any investment tax-free, including real estate, tax liens, precious metals, currencies, options, and private business investments and once you hit the age of 59 1/2 you will be able to live off your Roth 401K assets without ever paying tax. Imagine if someone told you that if you started making Roth 401K contributions in your forties and by just generating a modest rate of return, you could have over a million dollars tax-free when you retire. With a Roth 401K, live off the Roth 401K investment income tax-free or take a portion of your Roth 401K funds and use it for any purpose without ever paying tax.

The Roth Solo 401K Plan Advantages

Power of Tax-Free Investing: One of the main attractions to the self-directed Roth Solo 401(k) plan is based on the fact that qualified distributions of Roth earnings are tax-free. As long as certain conditions are met and the distribution is a qualified distribution, the Roth solo 401(k) plan participant will never pay tax on any Roth distributions received. The advantage of contributing to a Roth solo 401(k) plan is that income and gains generated by the Roth 401(k) investment can be tax-free and penalty-free so long as certain requirements are satisfied. Unlike with a pre-tax solo 401(k) plan contributions, contributions to a Roth solo 401(k) are not tax deductible.

The power of tax-free investing can be best illustrated by way of the following examples:

Example 1: Joe, a self-employed consultant began funding a Roth solo 401(k) plan with $3,000 per year at age 20 and would continue on through age 65. At age 65 Joe would wind up with $2.5 million at retirement (assuming they earn the long-run annual compound growth rate in stocks, which was 9.88 percent from 1926 to 2011). Not a bad result for investing only $3,000 a year.

Example 2: Ben, a self-employed real estate agent, who is 30 years began funding a Roth solo 401(k) plan with $8000 and wanted to know how much he would have at age 70 if he continued to make $8000 annual contributions and was able to earn at an 8% rate of return. Ben did some research and was astonished that at age 70 he would have a whopping $ 2,238,248 tax-free which he can then live off or pass to his wife or children tax-free.

Example 3: Mary, a self-employed real estate investor, who is 35 years began funding a Roth solo 401(k) plan with $13000 and wanted to know how much she would have at age 70 if she continued to make $13000 annual contributions and was able to earn at a 10% rate of return, which she felt was possible based off her past real estate investment returns. Mary did some research and was astonished that at age 70 she would have a whopping $ 3,875,649 tax-free which she could then live off or pass to her husband and children tax-free.

I am sure it may be hard for some of you to comprehend that putting away just a few thousand dollars a year in a Roth Solo 401(k) plan can leave you with millions of dollars tax-free. It’s as simple as making annual contributions to your Roth Solo 401(k) Plan and then generating tax-free returns from making real estate or other investments with your solo 401(k) plan.

High Contributions: A Roth Solo 401(k) combines features of the traditional 401(k) with those of the Roth IRA. Like a Solo 401K Plan, the Roth Solo 401K Plan is perfect for any self-employed individual or small business owner with no employees. The Roth Solo 401K Plan contains the same advantages of a Solo 401(k) Plan, but as with a Roth IRA, contributions are made with after-tax dollars. While you don’t get an upfront tax-deduction, the Roth 401K account grows tax-free, and withdrawals taken during retirement aren’t subject to income tax, provided you’re at least 59 1/2 and you’ve held the account for five years or more.

The Roth Solo 401(k) can offer advantages to self-employed individuals who wish to maximize their ability to generate tax-free retirement savings while receiving the ability to invest in real estate, precious metals, private businesses or funds tax-free and without custodian consent.

Unlike a Roth IRA, which limits individual Roth IRA contributions to $5,500 annually ($6,500 if the individual is 50 years or older), in 2016, with a Roth Solo 401(k) account, an individual can make Roth (after-tax) contributions of up to $18,000, or $24,000 for those 50 or older by the end of the year — allowing individuals to stock away thousands of dollars more in tax-free retirement income than they would through a Roth IRA.

A Roth Solo 401(k) is perfect for sole proprietors, small businesses and independent contractors such as consultants. The Roth Solo 401(k) plan is unique and so popular because it is considered the last remaining legal tax shelter available. There are so many features of the Roth Solo 401(k) plan that make it so appealing and popular among self-employed business owners.

It's Time To Let 401(k) Holders Invest Like the ProsUnlimited Investment Opportunities: With a Roth 401(k) Plan or Roth 401(k) plan sub-account, you can invest your after-tax Roth 401(k) Plan funds in real estate, precious metals, tax liens, private business investments, and much more tax-free! Unlike with a pre-tax 401(k) Plan, with a Roth 401(k) account, all income and gains would flow back tax-free to your account. As long as you have reached the age of 59 1/2 and have had the Roth 401(k) account opened at least five years, you can take Roth 401(k) Plan distributions tax-free. In other words, you can live off your Roth 401(k) Plan assets or income tax-free. With federal income tax rates expected increase, the ability to have a tax-free source of income upon retirement may be the difference between retiring early or not.

Loan Feature: While an IRA offers no participant loan feature, the Roth Solo 401k allows participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose at a low interest rate (the lowest interest rate is Prime which is 3.50% as of 12/21/15). This offers a Roth Solo 401(k) Plan participant the ability to access up to $50,000 to use for any purpose, including paying personal debt or funding a business.

Offset the Cost of Your Plan with a Tax Deduction: By paying for your Solo 401(k) with business funds, you would be eligible to claim a deduction for the cost of the plan, including annual maintenance fees. The deduction for the cost associated with the Solo 401(k) Plan and ongoing maintenance will help reduce your business’s income tax liability, which will in-turn offset the cost of adopting a self-directed Solo 401(k) Plan. The retirement tax professionals at the IRA Financial Group will help you take advantage of the available business tax deduction for adopting a Solo 401(k) Plan.

Cost Effective Administration: In general, the Roth solo 401(k) plan is easy to operate. There is generally no annual filing requirement unless your solo 401(k) plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ).

Exemption from UDFI: When an IRA buys real estate that is leveraged with mortgage financing, it creates Unrelated Debt Financed Income (“UDFI”) – a type of Unrelated Business Taxable Income (also known as “UBTI” or “UBIT”) on which taxes must be paid. The UBTI tax is approximately 40% for 2016. Whereas, with a Roth Solo 401(k) plan, you can use leverage without being subject to the UDFI rules and UBTI tax. This exemption provides significant tax advantages for using a Roth Solo 401(k) Plan versus an IRA to purchase real estate.

To learn more about the Roth Solo 401(k) Plan, please contact a 401(k) expert at 800-472-0646.

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Aug 02

Do You Need to Pay A Custodian with a Self Employed 401(k)?

No. The most significant cost benefit of the Self Employed 401(k) or Solo 401(k) Plan is that it does not require the participant to hire a bank or trust company to serve as trustee. This flexibility allows the participant to serve in the trustee role. This means that all assets of the 401(k) trust are under the sole authority of the Solo 401(k) participant.  A Solo 401(k) plan allows you to eliminate the expense and delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Do You Need to Pay A Custodian with a Self Employed 401(k)?

Please contact one of our 401(k) Experts at 800-472-0646 for more information.

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Aug 01

Why Choose a Self Directed 401(k) Over a Self Directed IRA

A Self Directed 401(k), also known as a  Solo 401(k) Plan, is an IRS approved retirement plan, which is suited for business owners who do not have any employees other than themselves and perhaps their spouse. The “one-participant 401(k) Plan” or individual 401(k) Plan is not a new type of plan. It is a traditional 401k Plan covering only one employee.  Unlike a Traditional IRA, which only allows an individual to contribute $5500 annually or $6500 if the individual is over the age of 50, a Solo 401k Plan offers the Plan participant the ability to contribute up to $59,000 each year.  Before the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) became effective in 2002, there was no compelling reason for an owner-only business to establish a Solo 401(k) Plan because the business owner could generally receive the same benefits by adopting a profit sharing plan or a SEP IRA.  After 2002, EGTRRA paved the way for an owner-only business to put more money aside for retirement and to operate a more cost-effective retirement plan than a Traditional IRA or 401(k) Plan.

There are a number of options that are specific to Solo 401k Plans that make the Solo 401k Plan a far more attractive retirement option for a self-employed individual than a Traditional IRA for a self-employed individual.

1. Reach your Maximum Contribution Amount Quicker: A Solo 401(k) Plan includes both an employee and profit sharing contribution option, whereas, a Traditional IRA has a very low annual contribution limit.

Under the 2016 Solo 401(k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $18,000. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $53,000.

Why Choose a Self Directed 401(k) Over a Self Directed IRAFor plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $24,000. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $59,000.

Whereas, a Traditional Self-Directed IRA would only allow an individual with earned income during the year to contribute up to $5500, $6500 if the individual is over the age of 50.

For example, Joe, who is 60 years old, owns 100% of an S Corporation with no full time employees.  Joe earned $100,000 in self-employment W-2 wages for 2016.  If Joe had a Solo 401(k) Plan established for 2016, Joe would be able to defer approximately $49,000 for 2016 (a $24,000 employee deferral, which could be pre-tax or Roth, and 25% of his compensation giving him $49,000 for the year).   Whereas, if Joe established a Traditional Self-Directed IRA, Joe would only be able to defer approximately $6,500 for 2016.

2. No Roth Feature: A Solo 401k Plan can be made in pre-tax or Roth (after-tax) format.  Whereas, in the case of a Traditional Self-Directed IRA, contributions can only be made in pre-tax format.  In addition, a contribution of $18,000 ($24,00, if the plan participant is over the age of 50) can be made to a Solo 401(k) Roth account.

3. Tax-Free Loan Option: With a Solo 401K Plan, you can borrow up to $50,000 or 50% of your account value, what ever is less.  The loan can be used for any purpose.  With a Traditional Self-Directed IRA, the IRA holder is not permitted to borrow even $1 dollar from the IRA without triggering a prohibited transaction.

4. Use Nonrecourse Leverage and Pay No Tax: With a Solo 401(k) Plan, you can make a real estate investment using nonrecourse funds without triggering the Unrelated Debt Financed Income Rules and the Unrelated Business Taxable Income (UBTI or UBIT) tax (IRC 514).  However, the nonrecourse leverage exception found in IRC 514 is only applicable to 401(k) qualified retirement plans and does not apply to IRAs. In other words, using a Self-Directed SEP IRA to make a real estate investment (Self Directed Real Estate IRA) involving nonrecourse financing would trigger the UBTI tax.

5. Open the Account at Any Local Bank: With a Solo 401k Plan, the 401k bank account can be opened at any local bank or trust company.  However, in the case of a Traditional Self Directed IRA, a special IRA custodian is required to hold the IRA funds.

6. No Need for the Cost of an LLC: With a Solo 401(k) Plan, the plan itself can make real estate and other investments without the need for an LLC, which, depending on the state of formation, could prove costly. Since a 401(k) Plan is a trust, the trustee on behalf of the trust can take title to a real estate asset without the need for an LLC.

7. Better Creditor Protection: In general, a Solo 401(k) Plan offers greater creditor protection than a Traditional IRA.  The 2005 Bankruptcy Act generally protects all 401(k) Plan assets from creditor attack in a bankruptcy proceeding.  In addition, most states offer greater creditor protection to a Solo 401(k) qualified retirement plan than a Traditional Self-Directed IRA outside of bankruptcy.

The Solo 401k plan is unique and so popular because it is designed explicitly for small, owner-only business.  The many features of the Solo 401k plan discussed above is why the Solo 401k Plan or Individual 401k Plan it so appealing and popular among self-employed business owners.

To learn more about the benefits of a Solo 401(k) Plan vs. a Self-Directed IRA, please contact a tax professional at 800-472-0646.

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Jul 29

First Handbook Published on Self-Directed Solo 401(k) Retirement Plan Now Available on Amazon

Adam Bergman, IRA Financial Group Partner, authors second book discussing the self-directed Solo 401(k) Plan

Adam Bergman, President of the IRA Financial Trust Company, announces the release of his second book on the self-directed Solo 401(k) plan titled, The Solo 401(k) Plan in a Nutshell. After the success of his first book, Going Solo: America’s Best Kept Retirement Secret For the Self-Employed – What Financial Institutions Won’t Tell You About Saving for Retirement, Mr. Bergman wanted to provide a more basic explanation of the self-directed Solo 401(k) plan. “I am very excited to offer readers a high-level review of the Solo 401(k) plan that laypeople can use to help them save for retirement,” stated Adam Bergman.

According to Mr. Bergman, “the Solo 401(k) is the gold standard for retirement savings and has enabled countless self-employed individuals to retire in comfort. But getting started with it can be stressful, and more often than not, books that try to explain it only make the proposition more complicated. I believe my new book will offer a easy to understand resource that simplifies the process while at the same time providing everything one needs to maximize their retirement assets and achieve financial freedom. The Solo 401(k) account is the key to building wealth for those who are self-employed or small business owners without full-time employees, and it is my hope that this book demystifies what it takes to establish and manage the plan. Unlike books that delve into the often-confusing intricacies of these accounts, Solo 401(k) in a Nutshell cuts through extraneous details and provides exactly—and only—what the layperson needs to put the investment in place and get started down the road to financial freedom.”

First Handbook Published on Self-Directed Solo 401(k) Retirement Plan Now Available on AmazonAdam Bergman is a partner with the IRA Financial Group, LLC, the markets leading provider of Self-Directed IRA and Solo 401(k) plans. Mr. Bergman is also the President of the IRA Financial Trust Company, a self-directed IRA custodian. Mr. Bergman is the author of four previous books on the taxation of retirement accounts: Going Solo, The Checkbook IRA, Turning Retirement Funds into Start-Up Dreams, and In God We Trust—In Roth We Prosper, which are all available on Amazon.com and Barnes & Nobles. In addition, Mr. Bergman is a recognized expert on IRAs and 401(k) Plans and is the founder of the BergmanIRAReport.com and the Bergman401KReport.com, and is a frequent contributor to Forbes. Mr. Bergman has advised over 12,000 clients on the self-directed IRA and Solo 401(k) Plan solutions.

Mr. Bergman has been quoted in a number of major publications on the area of self-directed retirement plans. Mr. Bergman has been interviewed on CBS News and has been quoted in Businessweek, CNN Money, Forbes, Dallas Morning News, Daily Business Review, Law.com, San Francisco Chronicle, U.S. Tax News, the Miami Herald, Bloomberg, Arizona Republic, San Antonio Express, Findlaw, Smart Money, USA Today, Houston Chronicle, Morningstar, and American Lawyer on the area of retirement tax planning.

Prior to joining the IRA Financial Group, LLC, Mr. Bergman worked as a tax and ERISA attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent corporate law firms in the world. Throughout his career, Mr. Bergman has advised thousands of clients on a wide range of tax and ERISA matters involving limited liability companies and retirement plans. Mr. Bergman received his B.A. (with distinction) from McGill University and his law degree (cum laude) from Syracuse University College of Law. Mr. Bergman also received his Masters of Taxation (LL.M.) from New York University School of Law.

Mr. Bergman is recognized as a leading retirement tax-planning expert and has lectured attorneys on the legal and tax aspects of Self-Directed IRA LLC and Solo 401(k) Plans. Mr. Bergman has also been retained by several leading IRA custodians to offer expertise on the Self-Directed IRA structure. Mr. Bergman is a member of the Tax Division of the American Bar Association and New York State Bar Association.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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