I am interested in PENSCO for Real Estate investments as
well and have read IRA Wealth book listed above. What my
question is... Is there a contact I can talk to for knowing
all this works and is not a scam or a looks cannon waiting
to go off. If one of you have used PENSCO or another firm, I
would like to hear you're thoughts on the process before I
make the first step..

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"MTW" <mtwingcpa[at]yahoo.com> wrote:
- quote -

real-estate. It has a list of resources in the back,
including IRA administrators that do real-estate
investments. It's called "IRA Wealth - Revolutionary IRA
Strategies for Real Estate Investment" by Patrick W. Rice &
Jennifer Dirks.

Here's the book on Barnes & Noble:
http://search.barnesandnoble.com/boo...57000940&itm=6

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- quote -

The 1099-R is also issued for pension plans...

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- quote -

It's not for the IRA, it's for qualified plans that might
distribute Net Unrealized Appreciation on company stock.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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- quote -

The 1099-R form is used for more than reporting
distributions from your IRA. In fact, it is also used for
401K distributions, annuities, and defined-benefit pension
plans. In some cases involving individuals born before 1936,
a portion of a lump sum distribution may be eligible for
"capital gains" treatment. Hence, the box on the form. The
instructions for the form describe this use.

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- quote -

The 1099-R is also used for distributions of 401(k) and
other employer plans. The capital gain portion of a lump sum
distribution from a 401(k) is optionally treated
differently.

--
Don EA in Upstate NY

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"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote:
- quote -

Well depending on where you live, I think it may not be
possible to have sole ownership in real estate out of an
IRA. Unless you rolled a ton of money in from other
qualified plans or speculated on penny stock and hit it big
in an IRA, an IRA funded solely by contributions isn't
likely to have enough funds to purchase real estate in many
urban areas. I'm also fairly certain you cannot finance the
property either without falling into the prohibited
transactions area.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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HW "Skip" Weldon wrote:

- quote -

Google on "real estate IRA."
http://www.google.com/search?sourcei...eal+estate+IRA

From one of the custodians I found, the fees look like...
$50 to set up the account
$100 for each real estate transaction
$250 + 0.2% of FMV in annual fees (for an account worth
between $100,000 and $500,000)
$8 per real estate asset per quarter

http://www.sterling-trust.com/realestate1.html has a good list of
limitations.

Phoebe

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HW "Skip" Weldon wrote:

- quote -

I have a client trying to set up such a deal with a
custodian called Pensco [www.pensco.com]. But. it's too
early to know how this is going. Ask me later. <g
MTW

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- quote -

Then what is the purpose of the capital gain box on Form
1099-R where the income from the IRA would be reported?

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Karen wrote:

- quote -

Real estate is generally a tax advantaged, shelter, investment. The best
investment for an IRA or a qualified pension is one that is fully taxed.
Others have pointed out the procedural problems associated with getting
a real estate investment into a IRA.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

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hristopher Green
<cj.green[at]att.net> wrote:

- quote -

I have yet to encounter an IRA that held real estate. I know it's
possible to do it, but I wonder about the practicality. Does anyone
know of a custodian who will hold it, and what the fees would be?

-HW "Skip" Weldon
Columbia, SC

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matildarocky[at]yahoo.com (Karen) wrote:

- quote -

If it is a Roth IRA, there would be no tax.

If it is a traditional IRA: The IRA pays no tax on the gain,
but the owner pays tax on all money received from the IRA at
regular income tax rates, not capital gain rates. Even if
the property were distributed out before the sale, the owner
would be taxed at ordinary rates on the fair market value of
the property.

Ken Belsak CPA

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matildarocky[at]yahoo.com (Karen) wrote:

- quote -

ALL withdrawals from a traditional IRA (except nondeductible
contributions) are taxed at ORDINARY income rates. It makes
no difference what the assets in the IRA are, whether real
estate, stocks, bonds, or cash. In the case of real estate,
no depreciation is claimable (or recaptured) and it makes no
difference how long you have held it.

- quote -

If it were a "qualified distribution" (5 years AND age
59-1/2), there would be no tax on the earnings (the
contributions have already been taxed).

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atildarocky[at]yahoo.com (Karen) wrote:

- quote -

If you can find a custodian who will hold real estate for
your IRA, and avoid any disqualifying transactions, any
distributions that aren't return of after-tax contributions
are ordinary income.

- quote -

No tax, so long as it qualifies as a tax-free distribution.
A Roth IRA with a custodian who can accommodate real estate
and in-kind distribution can under the right circumstances
be a good way to acquire, hold, and distribute property for
investment or eventual personal use.

--
Chris Green

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"Karen" <matildarocky[at]yahoo.com> wrote:

- quote -

All IRA distributions are ordinary income.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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matildarocky[at]yahoo.com (Karen) wrote:

- quote -

ALL withdrawals from a traditional IRA (except nondeductible
contributions) are taxed at ORDINARY income rates. It makes
no difference what the assets in the IRA are, whether real
estate, stocks, bonds, or cash. In the case of real estate,
no depreciation is claimable (or recaptured) and it makes no
difference how long you have held it.

- quote -

If it were a "qualified distribution" (5 years AND age
59-1/2), there would be no tax on the earnings (the
contributions have already been taxed).

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matildarocky[at]yahoo.com (Karen) posted:

- quote -

While real estate can be purchased within an IRA, there
would be no depreciation -- since IRAs do not file annual
income tax and therefore do not depreciate. The real estate
income would accrue within the IRA, and the profit from the
sale would simply be an asset within the IRA, which would be
the actual owner of the property. Remember, the great value
of an IRA is that the income or profit is *sheltered* until
distribution ... which is intended for "Retirement."

BTW, it may be difficult to find IRA trustees who will
accommodate real estate investments. There are only a few
of national scope. Most stockbrokers or banks won't touch
it.

Any distributions to the owner of the IRA would be treated
as ordinary income. As you note, that assumes the owner is
at least age 59 1/2 in the year of the distribution.

- quote -

No. But again, the profit would be to the Roth IRA, and the
earlier statements would apply.

Bill

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If real estate held more than one year is sold in a
traditional IRA and all the funds are distributed to the
owner (over 59 1/2), does the owner get taxed at capital
gains rates for the capital gain on the sale (25%
depreciation recapture and 15% LTGC) or is it all ordinary
income?

If it were a Roth IRA, would there be any tax at all?

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