IRA rollover vs Direct Transfer vs Direct 401k Rollover Which is More Advantageous

intro music Hi, my name is Terry White, CEO of Sunwest Trust. Today is Tuesday at two o’clock. Last week, and for the last couple of weeks, we’ve been talking about freedom freedom to invest in things other than stocks, bonds and mutual funds and then last week we talked about freedom to move your retirement account. So we’re going along with that same idea, freedom to move your account We’re going to talk about how you move your account.

Everybody talks about moving their account, and typically uses the word rollover quot;I want to roll my account over to you guys.quot; So I want to explain the difference between a rollover and a transfer because there’s a very distinct difference and it’s a very important difference Number one is the transfer Now transfer is when you move your IRA account from an existing custodian to another custodian. And that’s a transfer; the money never comes to you individually.

It just goes from one IRA to another IRA and that does not get reported to the IRS, because you never actually had receipt of the money. So there’s no taxable event in a transfer. Now, the word that most people use is rollover, and that means something very specific. A rollover is if you go to your existing custodian and you say quot;I’d like to have a check for $50,000 out of my account.quot;.

They’re going to write a check to you personally. Then, no matter what you do with that check if you put it in your checking account and then you turn around later and write a check to Sunwest Trust to roll the money over into Sunwest Trust into another IRA or whether you just take the check from whatever custodian you’re with, And you bring it to Sunwest Trust and you endorse the back of it, no matter what the old custodian is going to send you a 1099.

And they’re going to report that as a distribution to you And then what happens is when you come to Sunwest Trust we’re going to have you sign a rollover certification which basically says you haven’t had that money more than 60 days And in that event then we’ll do the rollover certification the money will be rolled over into your IRA at Sunwest Trust and you’ll report it to the IRS as a rollover Line 15 and 15a on your 1040 will say how much was the distribution.

And how much of it was taxable I’m not really sure about the line numbers so you need to have your tax person look at it So basically I took fifty thousand out of my IRA and by the way I put it into an IRA at another institution And I did all that within less then 60 days Recently, up until sometime this year, there was an IRS decision that you can only do that once a year per taxpayer.

Prior to that it was once a year per IRA account But the IRS decided that no, you can only do one rollover Not even per calendar year, it’s per twelve month period So if I do a rollover in October of 2014, I cannot do another rollover until November of 2015 I can’t do one in January, even though we’re now in the year 2016, it has to be only one within a twelve month period. I hope that answers those two questions.

5 Business IRA Investments You Can Invest in with an IRA Best Explanation Ever

Today’s Topic: Business Entities You Can Invest in with Your IRA Hi, My name’s Terry White, thank you for joining us this afternoon, we’re gonna go back and look at some of the information out of the SelfDirected IRA Handbook, which, if you haven’t heard before, this is a book that we make available to all of our new clients; and, if you’re interested in this, feel free to email me, or call our office, and if you’re a potential client of Sunwest Trust,.

We’d be happy to mail this to you; gives you a lot of great information. In the past, we’ve talked about what you cannot invest in, with your selfdirected IRA, and then we touched a little bit on we’re working now on the things that you can invest in. We talked about real estate last time, we talked about this subject, so, today, I want to talk about LLCs, Limited Partnerships, C Corporation, General Partnerships, and joint ventures.

And so, I want you to understand right up front, I’m not a lawyer, not giving legal advice, I’m just telling you what I know, from having thirty years in business, experience in having invested in some of these different type of vehicles. So, I’m gonna leave LLCs for last, because that’s probably the most widely used one. So, the first thing I want to look at, is a Limited Partnership interest. Now, typically, you see Limited Partnership Interests in real estate, but it could be for any kind of thing.

But, basically, what you have, is you have limited partners, which, the word ‘limited’, means that they’re limited in the amount of liability they accept, and then you have a general partner. So typically, your IRA is going to be a limited partner in this type of situation, and so, you’re limited to losing only what you’ve invested. So if you invest ten thousand dollars, the most you can lose is ten thousand dollars.

So, that’s what a limited partnership is: you’ve got a general partner, and then, typically, your IRA is going to be a limited partner. The next thing is a C Corp. A corporation, that the IRS looks at it as a C Corp, there’s S Corps, which you cannot invest in, with your IRA, and then, there’s C Corps. So, all of your big, tradeable companies on New York Stock Exchange, those are all C Corps,.

And what that means is, the income that they, the profit that they make, from whatever they do, is taxed, at a corporate level, and then, they can, or may choose not to pay dividends. If they pay dividends, then that dividend income would come into your IRA, and because it’s in an IRA, it will be either taxdeferred, or tax free. But the income from the corporation gets taxed at the corporate level. So, a lot of times, you may hear things like this about things called RAVs,.

A rollover to start a business. The IRS doesn’t look kindly on those, and we don’t recommend them, and if we know that’s what you’re doing, we won’t allow you to do it. But, the argument for that is, you form a C Corp, which pays its own taxes, and therefore, the IRS might not care, because they’re getting taxes on the C Corp, and then the dividends will flow through to the IRA, if there are any paid, and then it will be taxdeferred, or taxfree.

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