|
Seeking Funding?
Register to Receive An Application..
Tell us where to send your copy of
"Strategic Investor's Cipher" Enter Your Name and Email Below 
Your Information Will Remain Private and Will Never Be Sold! |
Jun
7
or those of you that wish to ramp up your retirement account beyond the Roth IRA contribution limits set for employed people ($5,000 per year) here is a scenario that can exempt a large portion of your income from taxation while also bracketing that same portion as your tax exempt retirement account.
This only works if you own or wish to own a portion of the business from which you derive your regular income.
If your small business produces enough income that you can choose to set aside some of it for your retirement then this is a way that you can legally avoid paying taxes on that amount of income.
You can set up your self directed Roth IRA to invest into your business. You retirement account will then own a portion of that business. The percentage of ownership also entitles your retirement account to that same portion of that businesses income.
The first thing you will want to do is to set up a self directed Roth IRA with a legal IRA custodian. Then you should set up an LLC for your investments. Then you fund that LLC with your retirement account funds. This allows you to have checkbook control of your retirement funds.
Now your new LLC can invest in your business. This works best with a start up business because the fair unit value or share value of your business is then most likely low.
This allows you to buy as large a portion of your new business as you want so that you can sock away that percentage of ownership as income into your retirement account.
The gain or income that is then deposited into your retirement Roth IRA llc is tax free because the initial investment was made with after tax money.
Unlike a traditional IRA you can borrow that money from your Roth IRA and never have to pay it back.
You should not purchase more that 49% of your businesses income or this could trigger a “closely held” red flag and cause that income to become taxable, but owning a minority interest in any business is permissible.
Investing in yourself can produce significant gains in your retirement nest egg but always consult with your tax accountant so that everything is done just right in your state.
You can get a step by step system (“LLC IRA Blueprint”) with the proper type of operating agreement for your new LLC from LLC IRA.org. They have researched and written an ira llc operating agreement that will allow the flexibility for future investments while remaining compliant with the IRS Code.
Here are some examples of what I am talking about.
- You can buy start up shares or units in a company that you are starting.
- You can buy the same in a new profitable spin-off of an already existing business.
- You can buy shares or units for fair market value in a pre-existing business.
- You can buy an option on real estate and then sell the property for tax free gains
Obviously the less you pay for interest in any company the greater the yield on that investment and the more ira funds you have available for other income producing investments for your retirement.