The purpose of this course is to educate individuals into the opportunities that exist with SELF-DIRECTED retirement plans. The key to TRUE self-directing is choosing investments that the individual knows best. The audience for this course will most likely be individuals who invest in these types of investments or trusted advisors such as CPA’s, Realtors, CFP’s who can provide clients for your office. The goals of this session are: Educate about the opportunities with PLANS and PLAN INVESTING Educate about the ways to invest in these investments Educate about the process to take advantage of these investments
(here is where we sell ourselves and establish our credibility) Why should you Listen to Entrust? We have been at it for over 26 years – and are the most often quoted authority on self-directed IRAs (WSJ, etc...) Clients have invested over $3B in assets selected by them and administered by us We provide training to Lawyers, CPAs, Financial Planners and other professionals We hold hundreds of workshops every year But best of all..... we are local – right here in Florida, where you can call us, stop by, pick up and drop off paperwork. All our transactions are issued from Florida, by people you will get to know and appreciate – not from a national call center...
Our strength lies not only in what we do – but ironically, what we don’t do. We don’t provide investment advice We don’t sell anything We don’t get commissions from anyone We are the “Switzerland” of investments – completely neutral. All if this allows you to make your own choices, limited only by your imagination and IRS guidelines.
Investment Choices- This is where we can show the audience what investments can be held in their Entrust Account. Reiterate that they are not limited to just securities. They can invest part or all of there retirement funds into these assets. SALES POINT: They have a world of choices with an Entrust Plan
Still more ideas to get the attendees thinking about the opportunities with a Entrust Account.
We briefly touched on what assets are allowed. What does the IRS actually prohibit? Cover what is not allowed by the IRS
Prohibited transactions. In a sales presentation its not always effective to dwell on the “DON’Ts”. Yet we will need to touch on prohibited transactions. You can always meet with the client one on one to get into more detail. Make sure they know the basic rules about what is not allowed: Self Dealing No personal Use No personal benefit
We now know about Self dealing and personal use, but let them know about disqualified persons. Self dealing relates to you, your family and your business (over 50%)
Well, we can now explain what it take to actually have a SD account of your own – to keep you on the road to retirement wealth... First, open your booklet and turn to page four. At the top of that page, write todays date and Got Savings LM (or any other identifier you choose to track the application). At the top of Page 5, check the box on how you plan on funding your account. The first choice would be for someone just getting started. The other three are for funds that are moving from a current or prior administrator.On Your beneficiaries are the individuals that will receive the proceeds from your IRA when you die – you can name as may primary and contingent beneficiaries as you like. However, if your spouse is not named as 100% primary beneficiary, you must obtain her signature on page six. Have we covered how much this costs? Nothing... until you make a purchase. Because you attended this seminar, we will waive the $50 application fee that most of our client pay. Once you make an investment – whether it is property, issuing a note, buying private stock – you will be charged $95 for the purchase, and as little as $125 per year for our administration, recordkeeping and reporting to the IRS. As your account balance grows, you have the flexibility of choose the best fee option for you as your needs change. The rest of the forms are for funding your account – and I/we will be glad to assist you in understanding the requirements of your current administrator to get those funds moved. I would also ask that each of you fill out the brief questionnaire that is in your packet before you leave today. It will give you a subscription to our IRA Insights newsletter, and help us serve you better in the future. Just hand it to me or any Entrust associate as you depart.
The Next Step- Let the audience know how they can learn more about self directed accounts. Let them know about your upcoming events. Let them know where they should go if they are looking for investment ideas.
We appreciate your interest in Entrust and Self-Direction and hope that we were able to answer many of your questions. We have only touched on the subject briefly today, and look forward to seeing you again at future workshops and serving you as a client.
Huge Opportunity for Retirement
Planning in IRAs
Dave Owens, CPA, CES
Entrust Leads the Field
26 years of continuing service
Nearly $3 billion in investor assets
Over 25 Offices Nationwide
Local offices in Fort Myers, Gainesville and Chicago
All transactions processed locally
Hundreds of CE and educational events annually
Un-invested funds are FDIC insured to $250,000
The Entrust Group, and its affiliates
("Entrust") do not provide investment advice
or endorse any products.
All information and materials are for
educational purposes only. All parties are
encouraged to consult with their attorneys,
accountants and financial advisors before
entering into any type of investment.
We will see an explosion of
What is a Roth IRA?
1) No Current Year Tax Deduction for Contributions
2) Tax Free Growth
3) Most Importantly Tax Free Withdrawals
Must have Earned Income to make Contributions
No Required Minimum Distributions
Tax Free Withdraw of Contributions
What is Happens in 2010?
Today, if you have Adjust Gross Income greater than
$100,000, you or your spouse are not allowed to
convert a Traditional IRA to a Roth IRA
On January 1st
2010, the Tax Laws will Change to
remove the Income Limit on Converting a
Traditional IRA to a Roth IRA
Traditional IRA Assets would be valued when
converted to a Roth
Taxpayer(s) will be taxed in 2010 with no early
Fair Market Value
IRS Definition of FMV - “The fair market value is the
price at which the property would change hands
between a willing buyer and a willing seller, neither
being under any compulsion to buy or sell and both
having reasonable knowledge of relevant facts.”
Minimizing the Tax
If you convert in 2010
Tax deferred for one year
Spread the tax bite over next 2 years
You will be required to pay ½ the taxes caused by the
conversion in 2012 and the other half in 2013 (2011 and
2012 tax returns)
…an interest free loan from Government!
Doing the Numbers – Case Study
50 year old client has a
traditional IRA of $200K
Purchases Resort Rental
property for $300K in 2004
Doing the Numbers – Case Study
Value at 1/1/2010 is $200,000
Client places IRA owned property into resort rental
Converts IRA owned property in January 2010 to a
Roth. Client is in 20% tax bracket.
Client reports conversion on 2010 tax return, but no
tax payment is necessary in that year
Doing the Numbers – Case Study
Property rents cover Expenses
Client pays ½ of the tax due to the conversion on
April 15, 2012 ($10,000)
Client pays remaining ½ of the tax due to the
conversion on April 15th
, 2013 ($10,000)
IRA property is rented out for the next 10 years. It
earns an average of $5,000 per year after PTI and
After ten years, client sells the asset for $450,000 and
pays no tax on sale
Doing the Numbers – Case Study
No tax on the distribution since the Roth IRA has
been established and funded for at least 5 years and
the client is older than 59.5
In addition, the client has a cash balance in his IRA of
well over $50,000 due to earnings
Is it Worth it to Convert?
Consult your Tax Advisor
Do you believe your assets are going to appreciate?
Do you believe your assets are undervalued today?
Will tax rates go up if you convert later?
Do you have the money to pay the taxes?
Manage your 2010 income to minimize gains
Planning NotePlanning Note
If you do not Qualify for a ROTH this year
Be sure to make a nondeductible Traditional IRA
Contribution for 2009 and 2010
Even it is Nondeductible you will be able convert and
roll this Traditional to a Roth
If you do a Nondeductible in 2009 and 2010, This will
give you at least $10,000 in your Roth on January 1,
2010, to invest.
Investment Choices for your Roth: Real EstateInvestment Choices for your Roth: Real Estate
• Single family and multi-unit homes
• Commercial property
• Improved or unimproved land
• Mortgage, lease/options
• Foreign property investment
• Trust Deeds
Collectibles & Life Insurance
• any work of art,
• any rug or antique,
• any metal or gem,
• any stamp or coin,
• any alcoholic beverage
• US Government Minted Gold Or Silver Eagle, Gold
and palladium bullion
What is Prohibited?What is Prohibited?
Prohibited Transactions: IRC Sec. 4975
An IRA cannot engage in any transaction (direct or indirect) with
anybody or anything considered related to the IRA
Some examples of prohibited transactions
between a disqualified person and an IRA are:
• Selling, exchanging or leasing property
• Lending money or extending credit
• Furnishing goods, services or facilities
Two key points with IRAs and real estate:
NO self dealing and NO personal use!
IRS Rules and Regulations: What is Prohibited
Examples of Disqualified Persons:
• You and your spouse
• Lineal ascendants (and their spouses)
• Lineal descendants (and their spouses)
• Any fiduciary of IRA
• Anyone providing services to your IRA
• Corporations, partnerships, trusts, or estates in which you
own, directly or indirectly, at least 50%
IRS Rules and Regulations:
1) Fill out the application1) Fill out the application
2) Select Method to Fund2) Select Method to Fund
3) Start Investing3) Start Investing
How to Set Up An Entrust Self Directed Roth IRA
Use Entrust as a Resource...Use Entrust as a Resource...
Learn more about self-directed retirement plans:
1. Weekly educational seminars
2. Special Continuing Education sessions for Brokers, Realtors,
Financial Planners, CPAs and Attorneys
3. Sign up for our free monthly publication “IRA & 401(k) Insights”
4. Visit our website: www.entrustfreedom.comwww.entrustfreedom.com for a large collection
of articles, applicable IRS code, and answers to FAQ
5. Just call us – we are a local resource and look forward to serving
you and your clients
Entrust Freedom, LLC
Dave Owens, CPA