Can I use an IRA for trust deed investing? Do I want to?

Spread the love

The short answers are yes and yes.

If you want to use an IRA for trust deed investing, your first step is to work with a self-directed IRA custodian company. These firms specialize in administering IRAs that are invested in alternative asset classes. When I say “alternative” classes I am simply referring to classes such as real estate and trust deeds.

Some of the more reputable IRA custodian companies in the Las Vegas area include Financial Solutions Inc. or IRA Central.

The reason you might want to use IRA funds (instead of other funds) to invest in trust deeds is that income received into an IRA or other qualified retirement account can be re-invested … (you guessed it) … tax-free! The taxes are due when the funds are withdrawn from the account.

Income from trust deed investments is treated as ordinary income. In other words, it is taxed at a relatively higher rate than some other types of income. Investing in trust deeds from an IRA account neutralizes this disadvantage of trust deed investments versus some other types of investment that are taxed at a lower rate.

The short answers are yes and yes.

Tags: , , , , ,