Investors can offset rising capital gain tax with Roth Solo 401k and Roth IRA, Sense Financial recommends

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The Time reports that in the latest State of the Union address, president Obama called for a higher tax rate on capital gains from investments. Sense Financial recommends Roth Solo 401k and Roth IRA to offset this increase.

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With a Roth account, plan holders will still have the same benefits, plus an important one: tax-free capital gain.

On January 20, 2015, the Time released an article regarding president Obama’s latest State of the Union address. According to the article, Obama proposed an increase tax rate of 28%, up from the current 23.8% rate, on investment capital gains. This increasing tax rate, if it takes effect, will affect millions of investment portfolios that hold assets such as stocks or real estate.

The good news is that, if the assets are held in an IRA, 401k, or Solo 401k, they will be less likely to be affected. These retirement accounts are tax-deferred, and therefore, all gains will not be taxed until the time of withdrawal. Meanwhile, the gains can stay and grow within the retirement plan, uninterrupted.

Many investors are more concerned about rising tax rates in both income and capital gain taxes. For these investors, a Roth IRA or Roth Solo 401k will be the right answer. With a Roth account, plan holders will still have the same benefits, plus an important one: tax-free capital gain.

Since the tax is paid up front on the contribution amount, the account will not be taxed again, even at the time of withdrawal. That means the gains from investing the original amount will not be taxed at all. Therefore, the rising capital gain tax will have no effect on Roth retirement accounts.

Another benefit of a Roth IRA or Roth Solo 401k is that, because the contributed amount is after-tax, the plan owner can withdraw the contributed amount at any time without any additional tax or penalty.

On top of that, with a self-directed Roth IRA or Roth Solo 401k, investors will be able to enjoy many other advantages, such as the ability to control their own retirement funds and a wide selection of investment options. Owners of a Roth Solo 401k also have the option to borrow from the plan with a low interest rate, and the option to leverage their real estate investment with non-recourse financing.

Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients to obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more about Solo 401k, please visit

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Vanessa Pham - Retirement Accounts with Checkbook Control
since: 07/2011
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