Real Estate Within an IRA

Real property is gaining popularity as one way to diversify retirement portfolios with investments beyond the traditional mutual funds and stocks. Of course like all asset options, Real Estate has both advantages and disadvantages. Here are some of the basics you’ll want to consider before taking this option.

Advantages; Diversification. Buying Real Estate is one way to diversify a portfolio that primarily holds stocks, bonds and mutual funds. Tax Benifets. An IRA may offer certain tax advantages including tax deductions for IRA contributions and deferred taxation of gains on appreciation (as always consult a tax accountant to determine you tax status).

Diadvantages; Mortgage interest is not deductable for Real Estate held in an IRA. Potetially higher tax rate. If the stream of income requires payment of unrelated business taxable income, the trust tax may be higher than the individual rate. For a copy of this complete article, or more information contact “Team Elite” at 925 392-4131