How do I Transfer Retirement Assets to a Self Directed IRA?
September 25th, 2011
The Self Directed IRA structure is an exciting retirement solution that allows one to use their retirement funds to make real estate and other investments tax-free. In order to establish a self-directed IRA structure, one would need to transfer retirement funds into the structure. In general, you can transfer, tax free, assets (money or property) from other retirement programs (including traditional IRAs) to a self directed IRA.
Generally, you can make the following kinds of transfers to a self directed IRA:
- • Transfers from one trustee to another
- • Rollovers
- • Transfers incident to a divorce.
-Transfers to a Self-Directed IRA: A transfer of IRA funds from one trustee directly to another, either at your request or at the trustee’s request, is not a rollover. Because there is no distribution to you, the IRA transfer is tax free. Because it is not a rollover, it is not affected by the 1-year waiting period required for rollovers. Therefore, one can transfer IRA funds from one custodian to a custodian that allows for self directed IRA investments tax-free!
– Rollover to a Self-Directed IRA: In general, a rollover is a tax-free distribution to the IRA holder of cash or other assets from one retirement plan to another. The IRA holder then has 60 days to contribute the rolled over IRA funds to a new IRA custodian. The contribution to the second retirement plan is called a “rollover contribution.” Generally, one can roll over amounts from the following plans into a self directed IRA:
– Traditional IRA
– employer’s qualified retirement plan
– A deferred compensation plan of a state or local government (section 457 plan), or
– A tax-sheltered annuity plan (section 403 plan)
-Transfers Incident to Divorce: If an interest in a traditional IRA is transferred from your spouse or former spouse to you by a divorce or separate maintenance decree or a written document related to such a decree, the interest in the IRA, starting from the date of the transfer, is treated as your IRA. The transfer is tax free.
In sum, there are many ways for one to move their retirement funds tax-free to a self directed IRA structure. The advantages of using a self directed IRA structure is that it allows one to make traditional as well as non-traditional investments, such as real estate tax-free. The tax professionals at the IRA Financial Group will assist you in transferring your retirement funds tax-free to the new IRA custodian and then to your new self directed IRA with checkbook control tax-free.
To learn more about the advantages of using a self directed IRA LLC, please contact an IRA expert at 800-472-0646 or visit www.selfdirectediraexperts.com