additional income tax due.) Yes, Sam will still pay the 10 percent early dis - tribution penalty; however, there will be no income tax due on the distri - bution as there would have been with the Traditional IRA. (If Sam were over 59½, even the 10 percent penalty would go away.) NO. 4 YourBeneficiarieswill thank you if you convert to a Roth IRA. Here is another example. Ben is proud of how he has built his Tradi- tional IRA. He started with very little and by making regular contributions and good investments, today he has an IRA with 12 houses all generating a positive cashflow.
the houses and liquidate the IRA, the adult children will have NO taxable event. Why? Because the IRA retains its tax treatment. As Alice had a Roth IRA, the “distribution” is not a tax able event. The above are just four of the advantages to making your invest - ment with a Roth IRA. There are oth - ers. Roth Conversions can save you hundreds of thousands in taxes. •
Ben passes, leaving his IRA 50%-50% to his two adult children. Should the children decide to sell the houses and liquidate the IRA, they will have a substantial taxable event. Why? Because an IRA retains its tax treatment. As this was a Traditional IRA, the “distribution” from Dad’s IRA is a taxable event. Alice is proud of how she has built her Self-Directed Roth IRA. She start - ed with very little and by making reg - ular contributions and good invest - ments, today her IRA holds 12 houses all generating a good cas flow. Alice passes, leaving her IRA 50%-50% to her two adult children. Should the children decide to sell
Dennis Blitz is a recognized authority on Self Directed IRA and Solo 401(k)s. He is an author, national speaker, and President of IRA Club. Today IRA Club has
thousands of members successfully investing their IRA and Solo 401(k) money in: Real Estate, Making Hard Money Loans, Private Placements, Agricultural Land, Life Settlements, Pre IPO-Stocks, and more.
thinkrealty . com | 61
Made with FlippingBook Online newsletter