Phase 2 - Real Estate 101 (How to or one big idea)

What Are The Benefits Of A Self-Directed IRA?

Tyler Stewert
August 24, 2021
What Are The Benefits Of A Self-Directed IRA?

Adam Hooper: So if someone has, like you said before, right? The bulk of America's capital is in retirement accounts. If someone has funds that are in a savings or in a taxable non-qualified account, Where should they be prioritizing one or the other? I know, obviously we can't give tax advice on the show here.

But generally, how do you see that decision making process of if there's multiple sources of funds were the benefits of doing it through their they're qualified by their IRA or 401k rollover versus a taxable account.

Mat Sorensen: So we always look at it and I think it's not an either or I really do.

Because even myself, I think of myself, I invest my personal funds into real estate. I invest my personal funds in the market. I am in the crypto, I'm doing different things there. I do the same thing with my retirement account. Some people say, and I don't agree with this. Some people say I want to invest in real estate with my personal funds cause I want all the tax benefits.

If you're a high income person making more than 150 grand a year the only way you're getting tax losses that can offset your other income is if you're a real estate professional. And so from the tax standpoint, a lot of these real estate losses, people seem to chase on their personal funds, which I get.

It can be good. They never see it anyways. Because in a retirement account, what happens is if my IRA buys real estate, it doesn't pay tax. So there's no depreciation loss, but a lot of people are fixated on that and say, what I want that depreciation last offset, my personal income. This is in your retirement account.

It doesn't hit your personal tax return. So there's no depreciation loss, but remember there's no tax either on the income. So the thing about it this way, if I bought, Yeah, the way the retirement account rules work, you buy Facebook stock for a hundred thousand dollars and you sell it for $150,000.

That $150,000 gain goes back in your retirement account. You pay no tax on the 50,000 gain. But when I buy a house, the same thing I buy, let's say I bought a real estate deal. I don't care if there's a duplex, I don't know, for a hundred grand. And I sold it for 150. That 50,000 gain goes back into the retirement account.

You don't pay tax on it either. So you get the same, no tax when you're making money and growing the account. I'm in the retirement account than you do. With stocks, as you're buying real estate, same deal for stocks.

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