If you are looking for a smart way to invest, then you probably already know that real estate is a surefire way to do it. However, there is also another little insider secret that not many know about. By using a self-directed IRA for real estate, you can leverage several advantages that you could not do otherwise.
Tax Shelter
Since IRAs are protected from taxes, either currently or in the future, depending on how you set it up, you can use the funds within it to invest in commercial real estate and not have to worry about such things as capital gains taxes. Of course, you need to be very careful about making a prohibited transaction as this could cause you to lose the tax-exempt status. It is always best to use an advisor to handle these types of transactions for you.
Controlling Assets
By using a self-directed IRA to invest in real estate, you are giving yourself much more control over your assets than you would typically have by using other means of investment. You must be familiar with IRS guidelines, however, so using a firm that is experienced with SDIRAs is highly recommended.
Protection From Creditors
Under strict bankruptcy laws, investments held in any type of IRA are protected from creditors in the event you need to declare bankruptcy. This is a very smart way to protect your self-directed IRA real estate investments while you regroup your finances and start again.
