Tax Free Real Estate Investing

Regardless of what kind of investing you’re interested in, a 401k Individual Retirement Account (IRA) is more than a good idea. In fact, the tax benefits make it an amazing idea, one which commercial real estate investors would be wise to implement. And when we say tax benefits, that’s with a capital B. This isn’t nickels and dimes. When you choose a self-administered 401k with the Roth contribution option, all your gains you EVER make will be tax free.

Tax free forever. Let it roll off the tongue. F-o-r-e-v-e-r. That’s a long time to keep Uncle Sam’s wealth-redistributing hands out of your pocket. Combine this financial windfall with the capability of investing in the world’s best asset through your 401k – real estate – and you can have yourself sitting pretty in short order.

While the IRS hasn’t exactly kept it a secret you can run your own tax-free retirement account AND invest in real estate with it, they haven’t been shouting it from the mountaintops either. Here are the pertinent details.

  • After-tax contributions are allowed to grow free forever and are not taxed upon withdrawal because – remember – you already paid taxes on the front end.
  • Individuals can contribute up to $20,500 annually; that’s $41,000 for married couples

The bottom line is this: You and your spouse can stash up to $41,000 in a self-administered 401k each year, and then turn around and use that money to invest in income producing properties according to Jason Hartman’s super-successful strategies.

You might recall the old Roth rules limited an individual’s contribution to $5,000 to $6,000 each year. The new 401k Roth allows contributions of $15,500 if you’re under 50 years of age, and up to the aforementioned $20,500 if you’re over 50. Even better, the self-administered option allows you to retain direct control over your investments, which is such an important concept that Jason Hartman ranks it #3 in his 10 Commandments of Successful Investing.

The idea of direct control is quite distasteful to Wall Street stocks and bonds pushers who earn so much of their money by churning your account and racking up administrative fees and charges.

Commercial property investors owe it to themselves and their families to learn more about the self-administered 401k Roth retirement account, and do it soon. Every day you wait is a day that the government will grab another piece of your income and not give it back. (Top image: Flickr | Infrogmation)

The Commercial Investing Center Team