Self Directed IRA Basics

How to Create Tax-Free Profits With a Self Directed IRA Investing in Single Family Homes

Have you ever dreamed of investing in single family homes, or other non-traditional assets, and not paying taxes on the profits?

Well dream no more, because realizing tax-free or tax-deferred profits on single family homes and other alternative assets is a reality. You don’t have to worry about paying taxes to the government on profits earned when investing in single family homes with a self-directed IRA.

Government sponsored plans such as IRAs and 401(k)s allow you to invest in almost anything (including single family homes), not just stocks, bonds and mutual funds. All the benefits those plans provide, tax-deductions and tax-free profits, apply to whatever investment you choose, including single family homes.

A Self-Directed IRA

The Power of Tax-Deferred and Tax-Free Profits

One of an IRA’s greatest features is that it allows Americans to enjoy the true power of tax-deferred compounding interest. Compound interest occurs when interest is earned on a principal sum along with any accumulated interest on that sum. In other words, you are earning interest not only on your original investment sum, but also on the interest earned from the original sum.

Compound interest can occur with any investment you make, but the “true” power of compounding interest is obtained when you make an investment in a tax-deferred environment, like an IRA.

By taking advantage of an IRA’s tax-deferred status, you do not have to pay tax immediately on your earning. Thus, you are able to enjoy the power of compounding on ALL of your profit, not just what is left after taxes.

Now apply those benefits to single family homes or other alternative assets. Tax-deferred profits on your single family homes transactions allow greater flexibility to make more investments or to just sit back and watch your investment grow in value, without worrying about taxes.