Self-Directed IRA Blog Explains Hiring Contractors in a Real Estate IRA Property
Atlanta, GA (PRWEB) October 05, 2017 -- Noting that real estate held in a Real Estate IRA is very similar to any type of real estate investors might own, a recent post at the American IRA blog authored by CEO Jim Hitt explained how investors should go about hiring contractors for their property.
“Real estate held within a real estate IRA is no different than real estate held elsewhere,” said Jim Hitt in the article. But Jim Hitt was quick to point out that there are a number of regulations and rules that IRA holders will want to know about if they are to avoid a number of fees and penalties.
For example, it is required that the holder of a Real Estate IRA observe the prohibited transaction rules when it comes to the property they hold. For example, if an investor who holds real estate is a plumber, they will be expected not to hire themselves to fix a broken toilet. Because an investor cannot pay themselves with money held in their own Real Estate IRA, it will be expected that they hire third party contractors to handle repairs and maintenance on the property.
As Jim Hitt explains, these rules are in place because the IRS does not want investors to use retirement vehicles to enrich investors in sneaky ways—doing so would promote the use of retirement accounts for general use, which is not the purpose of retirement accounts in the first place. “It’s important for investors to see a Real Estate IRA not as a way of squeezing out more money now, but for efficiently building wealth in the long-term,” says Jim Hitt.
Another issue is keeping financial accounts strictly “segregated.” For example, investors will be expected not to pay a contractor with money from a personal account, but rather money in the Real Estate IRA. This can come through direct IRA contributions or even using old profits that have been held within the IRA itself.
By avoiding these conflicts of interest, Jim Hitt argues, investors will use the IRAs as they’re intended: to build retirement wealth with powerful long-term protections. “Keep your retirement and your personal lives separate,” Jim Hitt says. “That way, you protect your assets—and yourself.”
About:
American IRA, LLC was established in 2004 by James C. Hitt in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Mr. Hitt and his team have grown the company to over $250 million in assets under administration by educating the public that their self-directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a self-directed IRA administrator they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville, NC.
Sean McKay, American IRA, LLC, http://www.americanira.com, +1 (828) 257-4949, [email protected]
Share this article