Rachel Stolrow: To preface before our webinar here, I do want to note that the Entrust Group does not provide any investment advice or endorse any products. As usual, we always recommend that all clients seek advice from an attorney or a licensed tax advisor, to see if it's the best investment fit for them.
Rachel Stolrow: So on today's agenda, again, we'll be reviewing the top 5 mistakes that IRA holders make, and how to avoid those mistakes, building positive management habits, and then we'll leave time at the end for a quick Q&A.
Rachel Stolrow: A little bit about me. So, I've been with the Entrust Group. My name's Rachel Stolrow. I've been here for over 9 years. I love to educate investors and professionals on how to use tax-advantaged accounts to invest in alternatives.
Rachel Stolrow: The company here at the Entrust Group, we've been in business for quite some time, so we're self-directed IRA administrators, we have a lot of knowledgeable staff, primarily with CISP certifications, and just like this one, we like to host monthly educational webinars to educate clients and those alike, on IRAs.
Rachel Stolrow: We have $5 billion in assets under management, so again, we've been doing this for quite some time, with over 40 years in service.
Rachel Stolrow: 24,000 active clients, and we provide every single client and company with a team of two. So that's something we really pride ourselves on. We try to give personalized service. It's not always the easiest place to, you know.
Rachel Stolrow: Do transactions, since it does require more client involvement, but rest assured, we do provide every client with that seamless team of two to help ensure things run as smoothly as possible.
Rachel Stolrow: Alright, so avoiding the top 5 mistakes of IRA management.
Rachel Stolrow: So, why are we going over these mistakes? Part of it is learning how to manage your IRA.
Rachel Stolrow: Understanding the most common errors that account holders make and how to best avoid them.
Rachel Stolrow: And then we'll highlight today the classic no-no's, or the classic things that we see. These aren't only an important lesson to help understand, but it's also a great foundation to help maximize your IRA strategy.
Rachel Stolrow: So, keep in mind, these are the top 5 mistakes. So, it could be mistakes that you've already heard of, or you're at least familiar with. These are what we see the most. If you want a more in-depth webinar, maybe on a specific topic, or additional mistakes that we see happen, please let us know, and we'll be happy to look at that in 2026.
Rachel Stolrow: Okay, number one is mistakenly engaging with a disqualified person or in a prohibited transaction.
Rachel Stolrow: So, people who are disqualified, it would be considered yourself, so no doing business with yourself, and really anyone in your lineage, so that would be your spouse.
Rachel Stolrow: Parents, Grandparents, Children, great-grandchildren, fiduciaries, and beneficiaries on your plan.
Rachel Stolrow: Understanding the rules. So what happens if you engage with a disqualified person? Well, your entire account could be at risk or distributed on the first day of the tax year if you even unknowingly engage with a disqualified person or in a transaction.
Rachel Stolrow: So let's go with an example here. Say you're 50 years old.
Rachel Stolrow: You have a traditional plan with over $500,000, or a balance of $500,000.
Rachel Stolrow: You decide to use those funds to purchase a rental property, then rent that property to your daughter. This transaction's considered prohibited because, again, you're transacting with somebody in your lineage, and this does actually… this question at least, comes up quite a bit.
Rachel Stolrow: So what happens? Consequently, the entire value of that traditional plan, $500,000, will be considered distributed on the first day of the new tax year. So, for example.
Rachel Stolrow: making this sort of transaction with similar value could be over, or in value of a $160,000 mistake. So…
Rachel Stolrow: we always encourage clients, please ask us questions. We're not advisors, we're not fiduciaries, as I mentioned, but we can absolutely provide you with the rules. So, I have this conversation a lot with clients that want to maybe lend money, or have, somebody who's prohibited, rent the property, and
Rachel Stolrow: And again, we can have those conversations or defer you to someone else, like a tax advisor.
Rachel Stolrow: That can have a more in-depth conversation with you.
Rachel Stolrow: So, prohibited transactions. Any improper use of an IRA or plan by the plan participant or a disqualified person is not permitted, and that can even be, if it's unbeknownst to you, you accidentally make a prohibited transaction, it is still not permitted.
Rachel Stolrow: This could be borrowing money from a disqualified person, so maybe somebody within your lineage, again, direct lineage, wants to borrow money.
Rachel Stolrow: buy or sell a property, or even rent out of the property, or maybe even do some sort of service. If you have a, son or daughter who is in construction, and you want them to do work on your property, it's still not permitted.
Rachel Stolrow: Also, investing in a company owned by a disqualified person.
Rachel Stolrow: Number two, it's not understanding or planning for future costs and potential additional funding needs.
Rachel Stolrow: So, here are the rules. Understanding the rules and consequences. They have strict funding rules. Number one, all available funding options confirm your maximum self-funding potential. Number two…
Rachel Stolrow: your current and future potential needs to ensure you can cover these costs. It helps shape those boundaries. So never risk, and we'll get into an example, but never risk the position of your…
Rachel Stolrow: account needing to engage in a prohibited transaction, because maybe you just need some money to pay that tax bill that came, and now there's no more money in your account. Some prohibited transactions will cause your IRA to be deemed ineligible, and we don't want those early withdrawals or penalties.
Rachel Stolrow: So, an example. So, you own a multifamily home, an apartment building, or a condo using your IRA funds. You end up investing most, 90% of those available funds.
Rachel Stolrow: And now you only have 10% cash to handle unexpected costs.
Rachel Stolrow: Those could be a water heater that breaks.
Rachel Stolrow: A large bill that you receive.
Rachel Stolrow: Maybe you even want to do something cosmetic, like redo the kitchen.
Rachel Stolrow: Things come up and things happen, so that's why, many people, and there's ways…
Rachel Stolrow: I don't want to say around it, but there's ways to plan ahead where people will either partner with somebody or themselves at the initiation of the transaction to help mitigate those types of issues coming up in the future.
Rachel Stolrow: So, planning to ex… to succeed. Ideally, again, as always suggested, chat with your financial advisor, review your contribution capabilities across all your accounts.
Rachel Stolrow: your partnership laws and processes, and vet any investments that you may… you may be wanting to make. Doing these things can better set up your account to possibly run the risk of engaging in a prohibited transaction in the future.
Rachel Stolrow: So, number 3, not educating yourself on the latest tactics scammers use against you and how you stay safe.
Rachel Stolrow: So, understanding the consequences. This is a very… I don't want to say common thing, but it's more and more common, and people are getting more and more
Rachel Stolrow: these scams, so there's over $1 trillion in losses reported to fraud in 2024. Classic pyramid schemes, spoofing emails, AI voice, which is, you know, a newer one.
Rachel Stolrow: trying to scam investors every day. So, with these complexities, it's crucial that you understand the tactics that are being used, you vet with.
Rachel Stolrow: And stay educated to make sure that you're making a proper investment decision, and that you protect that nest egg that you've built up, and you've worked so hard for.
Rachel Stolrow: learning with the most common example. So.
Rachel Stolrow: what has been seen the most. You get a regular email from a business partner, urgent review to, urgently reviewing it and anticipated legal document from your company's lawyer. So after opening this document, you realize that it was actually spam.
Rachel Stolrow: When you call them, you say that you never intended that email, and you realize you now clicked on a phishing link. And now the investment is at risk, to risk criminal with access.
Rachel Stolrow: So again, I… what I always do is, if I'm not expecting something from a person, even if it's a company or a person that I've…
Rachel Stolrow: corresponded with in the past. If you don't expect it, delete it. You can always pick up the phone, you can always call the person, and if it truly is an important document that you need to read, review, or act on, the person will end up calling you to follow up on that directly.
Rachel Stolrow: So, planning to succeed. Some of the most common schemes to prepare for. Business scams, like Ponzi schemes.
Rachel Stolrow: Telemarketing fraud. Business email compromise.
Rachel Stolrow: Charity and disaster fraud.
Rachel Stolrow: Cryptocurrency fraud.
Rachel Stolrow: Elder fraud, holiday fraud, which we're all in the holiday season, so you see that ramping up. Ransomware.
Rachel Stolrow: Spoofing, phishing, very, very common, and then tech support scams.
Rachel Stolrow: So those are the latest digital investment scams in October's webinar, and we'll send you a replay of the slides and follow up via email. So let's go into the next one.
Rachel Stolrow: Number four, not completing enough due diligence on companies, partners, or investments. So, really rushing into an investment without doing the proper vetting. As mentioned, Entrust isn't an advisor, we're not a fiduciary, and so we don't go in and do that deep due diligence that is needed on some of these investments. So.
Rachel Stolrow: There may be unexpected costs or taxes. The most common, is that the cost
Rachel Stolrow: expected, or paying higher taxes on an investment than they… when they thought it was going to be tax-free. So, some of these investments have, and we'll get into that in a minute, what's called UBIT, or Unrelated Business Income Tax. So, if you don't have funds to handle these upfront costs.
Rachel Stolrow: You can earn less or expect to, you know, maybe uphold… fail to… in upholding your funding responsibilities to this company.
Rachel Stolrow: So, learning with an example. You enter a rental real estate investment.
Rachel Stolrow: for $100,000, but you didn't realize there was unrelated business income tax on your investment. So now all your financial projections are inflated, you're going to be earning less than what you had expected, and you're locked in for 3 years before the ability to withdraw any funds.
Rachel Stolrow: So, what is UBIT, or Unrelated Business Income Tax? It is applicable to a small portion of investments.
Rachel Stolrow: Typically, the IRS defines UBIT as
Rachel Stolrow: income from a trade or business regularly carried on, that's not substantially related to the educational or purpose of the organization's exemption. So, to verify if your investments are deemed UBTI
Rachel Stolrow: free, or if they do have it, added onto it, I'd consult a tax advisor. I'd also speak with the investment provider that you're looking to invest with, because more likely than not, they will know and understand if their investment has this sort of tax attached to it.
Rachel Stolrow: Right, so always remember, investments with your financial or tax advisor are important to verify any implications of agreements.
Rachel Stolrow: Taxes that arise on that investment.
Rachel Stolrow: You know, being sure to research, ask questions, look at financial reports.
Rachel Stolrow: Any key metrics or investment opportunities, and really how this fits into you specifically as an individual, and maybe your other investment portfolio that you may have.
Rachel Stolrow: Calling current or past clients for transparency, making sure you vet potential partners, and catching those red flags early. We also did a really good webinar on red flags, I believe about a year ago.
Rachel Stolrow: Which you can find through our Learning Center, which
Rachel Stolrow: Which provides a lot of additional context in this due diligence section as well.
Andrew Crawford: And Rachel, I'd love to add one point. We've been seeing a lot of individuals with IRAs experiencing misunderstandings, basically, with different entities and their fee structures. As an example, precious metals investors experiencing
Andrew Crawford: basically free fees for one year, but then being hit with unexpected fees because, supposedly it was buried in the fine print. So be very careful and make sure you're understanding the long-term fee structures of anybody you're getting into business with. Thank you.
Rachel Stolrow: Thank you for adding that, Andrew, and that's right, sometimes there are companies that will take care of fees, and it's not to be, you know, nefarious or do anything wrong, but sometimes clients just simply forget that year is up.
Rachel Stolrow: where their fees have been taken care of, and now they're thinking, what happened? Why am I incurring these fees? So, again, do your planning, do your due diligence. There's very limited ways.
Rachel Stolrow: to get money into an IRA, you know, that would only be through a contribution, a rollover, or a transfer. So, really making sure that you're setting your IRA up for success, you don't run into any of these issues in the future, where you're, again, making less money than you had initially anticipated.
Rachel Stolrow: Or incurring any fees that you may not be able to cover within your plan.
Rachel Stolrow: And so, number 5, not creating a strategic plan for managing beneficiaries. This is a really big one.
Rachel Stolrow: So, rules and consequences. There are a lot of circumstances,
Rachel Stolrow: of why you should even create a good beneficiary strategy to begin with. My recommendation is do it right up front if you're opening your account. Make sure that's on there, and making sure that you set a reminder for yourself every year to get that updated. Without a good contingency plan, you and your loved ones, could be at risk.
Rachel Stolrow: Or run the risk of, of, proper planning within your retirement plan and making it harder on any beneficiaries and dependents that you may have.
Rachel Stolrow: So, learning with an example. So, we see this a lot. People will skip through and say, I want to complete the beneficiary form later, so we have a completely blank, or even any custodian for that matter, has a completely blank beneficiary form.
Rachel Stolrow: what happens,
Rachel Stolrow: It can go to the state, it can go to the ex, and intended beneficiaries, maybe even intended beneficiaries that you have at another financial institution, run the risk of having to fight for or, you know, have it go to somebody else.
Rachel Stolrow: Unexpected taxes, so if you don't prepare your beneficiaries.
Rachel Stolrow: for the tax rules and future inherited accounts, so maybe your beneficiaries were set up properly, but your beneficiary didn't really understand what a self-directed IRA was, didn't really understand
Rachel Stolrow: Maybe a property that's held in your account, taxes that may be due, fees that may come up, it could… could run the risk of
Rachel Stolrow: You know, maybe them improperly handling their account, not paying as much attention, because they didn't realize quite how important it is to pay the tax for that property that came up in your retirement plan.
Rachel Stolrow: So, creating an informed plan. The best steps to do that, again, I would do it annually.
Rachel Stolrow: Making sure that anytime there's a qualifying event, you get married, get divorced, adding or removing that spouse, any birth, death of a child, death.
Rachel Stolrow: And divorce, again, as mentioned, being sure those big qualifying events, that you're reaching out to all your financial institutions, logging into your accounts.
Rachel Stolrow: updating those beneficiaries, you know, we've all been there. I've actually noticed before that, hey, I was married a couple years ago, and there was an account that was never updated. So, making sure that you really have all those accounts listed, and you update them, marriage, death, divorce, birth, all really important ones.
Rachel Stolrow: And then, when you review and you consolidate any retirement plans that you may have.
Rachel Stolrow: So, building positive management habits.
Rachel Stolrow: Starting with education. IRAs, self-directed IRAs, require your attention to detail. Commitment to understanding what's needed for you to maximize the opportunities, mitigate risk.
Rachel Stolrow: And a lot of that comes with education, and continued education, so keep learning, keep logging in to these webinars, keep asking questions, you know, there, there's…
Rachel Stolrow: four business development managers here at the Entrust Group, and we all have a really great team, and really the company across the board, so we are always happy to educate. If there's a question that we can't answer. We are very upfront. We let you know that, that, hey, this may be a good question to ask an advisor, an attorney, so that you can stay educated.
Rachel Stolrow: And you can keep ahead of these top, mistakes that we see.
Rachel Stolrow: So, create a plan and track your progress. Correcting bad habits and good… building good ones doesn't happen overnight. You need to outline your annual management calendar, so I just set a reminder, make sure that everything is done on time.
Rachel Stolrow: So that you help prevent any of these, from happening. So, no good plan is without consistent execution and review, so make sure that you continue to do that. Can't… can't say that enough. And then asking for help.
Rachel Stolrow: So again, we're here to assist you if you want to ask any IRA-related questions.
Rachel Stolrow: If not, involving that tax advisor, financial advisor, attorney to help get their insight and make sure that you're asking for their help if something doesn't seem right, or maybe you have that gut feeling, and you just want someone else to look over it, it's best to just seek advice, because the consequence
Rachel Stolrow: Is a lot harder than that up work… that upfront work of getting the question answered.
Rachel Stolrow: Alright, so wrapping up.
Rachel Stolrow: IRAs, I want to say it's really easy, and I say it with a smile on my face because I talk about it almost every day. So, it happens in 3 easy steps, and as I said, we have a really great team in place
Rachel Stolrow: to help hold your hand and make sure, that we walk you through these steps. So, getting started with a self-directed IRA is really done in 3 steps.
Rachel Stolrow: Number one, you establish your plan.
Rachel Stolrow: Number two, you fund your account.
Rachel Stolrow: And number 3, you direct us to make your purchase. And that's typically done through an invite… invoice, or some sort of investment agreement.
Rachel Stolrow: Alright, so what's next? After this, we'll follow up with a video replay.
Rachel Stolrow: slides, additional information, and education. Like I mentioned, I do know that we did some sort of due diligence webinar, and we had on a specialist in the last year, so use… going to our learning center, www.theentrustgroup.com, viewing our learning center, and really just looking around there and looking at past webinars, whether it's about due diligence, LLC creation.
Rachel Stolrow: things of that nature. It's a really good resource, and it's a…
Rachel Stolrow: amazing place to build that core knowledge of self-directed IRAs, and really any topic, you know, in between with investments.
Rachel Stolrow: register for January's webinar. What we'll be going over is the new 2026 IRA limits, any laws and preparation strategies for your account.
Rachel Stolrow: What's next? So, again, visit our website and our Learning Center. I talk about it all the time. It's… our marketing team has worked really, really hard on making sure that stays, informative, up-to-date, and we have so many resources on there. So, really just going to our website, going to our Learning Center.
Rachel Stolrow: Following us on any social media for updates, webinars, like this one, and then getting on our mailing list.
Rachel Stolrow: questions answered.
Rachel Stolrow: Alrighty, sorry, just pulling them up here. I think I went out for just one moment.
Rachel Stolrow: So…
Rachel Stolrow: Okay, first question. Interest is clear that it doesn't do due diligence. Where does a potential investor turn to to have somebody perform due diligence, and who does this work? So, it would be with a financial advisor,
Rachel Stolrow: who is familiar with self-directed IRAs, so…
Rachel Stolrow: Not all financial advisors specialize in alternative assets, so finding a financial advisor that is familiar with this space, because they're not public investments, and have a lot of public knowledge, so really finding that specialist,
Rachel Stolrow: That can answer those questions for you.
Rachel Stolrow: Next question, cost. So, the cost, I would assume, and please do,
Rachel Stolrow: Type another question if I'm misunderstanding this. So, the cost for, at least on the interest side of things, it varies based on the value that we are custodying, sending to your investment, and keeping record of. So, again, that would be your investment.
Rachel Stolrow: that you hold here at the interest group. Any cost incurred if it's on… on the… the side of the investment that you're making, it's… that portion is always determined by the investment provider that you're working with.
Andrew Crawford: And Rachel, I'm seeing that this individual submitted as anonymous. If you reach out to us or submit your email or name, I can find your contact information from the registration and send you our most recent fee schedule.
Rachel Stolrow: Absolutely. Thank you.
Rachel Stolrow: Next question, let me see here… So, can you be more specific about when you run out of funds, i.e. a major repair on a rental home and you have no other eligible income to pull from? Yeah, this is a, I wouldn't say…
Rachel Stolrow: A huge problem, but it can be an absolutely huge problem, and it's a common…
Rachel Stolrow: issue that may arise, so…
Rachel Stolrow: Client sends, in our example, again, 90% of their funds over to an investment. They only have 10% cash, and the cost of the repair exceeds the value of cash.
Rachel Stolrow: You only have 3 options, really 4. Number 1, make a contribution if you haven't reached your contribution limit, and that's across all accounts, not just your interest plan. We're all submitting, we're all reporting at the end of the year, so it's going to be the total of all your accounts, so…
Rachel Stolrow: Contribute if you're still eligible to contribute, transfer from another IRA plan, roll over your money from a 401 plan, which can be limited, based on if you're employed with the plan provider.
Rachel Stolrow: Or you can get a non-recourse loan, and it's the only loan that's really allowed within a retirement plan. And, those are very specific and unique loans, and please know we're not a bank, we're not a, a lender, so you would have to reach out to
Rachel Stolrow: Specifically, or one of these lenders specifically, to get what their rules are, and if you're able to get one of those loans.
Rachel Stolrow: So that's where having that strategic planning, planning for the future, knowing
Rachel Stolrow: What your property may run the risk of, and what that potential cost may be, and making sure you have that, and then some.
Rachel Stolrow: For that… for that fee that may come up.
Rachel Stolrow: Okay, next question. Can the interest fees be paid by a personal credit card? Yes, absolutely. You can pay via your credit card or by debiting your interest account.
Rachel Stolrow: cost just for the account. Thank you for the clarification there. So, the cost for, again, the interest retirement plan, and we're not talking about funding the investment, but when it comes to, like, the default fee of our annual record keeping and reporting fee, it will be…
Rachel Stolrow: For… based off of the value of your investment.
Rachel Stolrow: So please, do reach out to us, let us know if you have any questions. Also, drop your email, we're happy to actually send our fee disclosure so you can see, based on your situation, what you're looking to invest, how much that may be.
Rachel Stolrow: Okay, going to the next question here, Andrew, let me know if I'm… if I'm skipping anything. If I purchase land through my self-directed IRA, can I construct a building on it using personal funds? No, you cannot.
Rachel Stolrow: a very common question as well. So, you can't construct, you know, do any construction on it, even if you have a construction business, even if you can do it for 50% of the cost, and that would be anybody in your lineage as well, those prohibited people that we talked about. You cannot do business with your IRA.
Andrew Crawford: And really quick, as a reminder, because somebody sent a clarifying question about brothers and sisters, and we'll send this in the follow-up email, is again, this list who are not disqualified are brothers, sisters, aunts, uncles, cousins, step-siblings. So again, we'll send that in the reminder in the email, but…
Andrew Crawford: just be clear, very clear, on who your DP is and who is not disqualified. Thank you.
Rachel Stolrow: And caveat is, if that brother or sister's your beneficiary, then you can't do business with.
Andrew Crawford: Thank you, Rachel. We'll send a few of the nuances as well. Appreciate you.
Rachel Stolrow: Yep, of course. Okay, next question. So, let's see here. If I already have an IRA and I want to do a Roth conversion, can I do it through a request online? Will that happen automatically?
Rachel Stolrow: Or will it create a Roth for me, or do you round value based on metal price? Can I keep the… okay, there are several questions.
Rachel Stolrow: within that question, so I'll try to get them all. Number one, you can do a Roth conversion. You can do a Roth conversion, even if you have an investment already in your account. You don't need to convert the entire account. You can do a portion. Again, as we always say, work with a tax advisor. Maybe there's, you know, doing it over the course of 5 years.
Rachel Stolrow: Is what's most, beneficial for you in terms of… of taxes.
Rachel Stolrow: Second, can you do that request online? Absolutely. We have an amazing online portal that our team has worked very hard to.
Rachel Stolrow: keep, you know, very robust and clean, so yes, you can do it online. In doing so, it will not automatically establish a Roth plan for you, as like anything that we need to do here, we need client permission and client, application authority to do things, so…
Rachel Stolrow: when you go to do a Roth conversion online, if we notice that you don't have a Roth plan open, we will then ask you to create one so that we can complete this for you. So,
Rachel Stolrow: if you submit it and you don't have it, no problem at all. We'll make sure that we let you know that, that that's what you need to do. So, the other portion of the question is, do we round the value based on metal price? Can you keep…
Rachel Stolrow: Can you… can keep in metals. So yes, you can keep the metals in your account, when you do the Roth conversion. We'll be getting the accurate value, so that… that is converted properly. When it comes to rounding
Rachel Stolrow: Value based on metal price.
Rachel Stolrow: Please do reach out to us to get these questions answered. We have an amazing precious metals team.
Rachel Stolrow: That works really hard when doing the conversions, so they would know that a little bit more about how the metals are valued at conversion time. But I almost know without a shadow of a doubt that we will need updated, accurate values for the conversion.
Rachel Stolrow: Before that takes place.
Rachel Stolrow: While the IRA owner cannot remodel the property, the owner can oversee and manage the remodeling. Can you give me more detail on overseeing and managing?
Rachel Stolrow: Yes.
Rachel Stolrow: So, you cannot be…
Rachel Stolrow: paid to do any work on the property. You cannot be paid to manage the property. Can you do the coordination in…
Rachel Stolrow: Hiring the proper construction company or… or…
Rachel Stolrow: Or, vendor that you're gonna be, using to do the, the, the remodeling, absolutely. But, again, you can't be part of, like, that
Rachel Stolrow: Paid team and,
Rachel Stolrow: being paid, for that portion of the property. So I hope that answers your question. Can the property… yeah, I'm just making sure that I read and answered it all. But again, you can do the management in terms of finding the
Rachel Stolrow: provider, and not being paid to do the work, okay? Next question. If I have a self-directed IRA in real estate.
Rachel Stolrow: And I do well in my rental property for the year of 2026. When can I take the profit and move it to my savings? Will I also have to…
Rachel Stolrow: will I need to have a 1099 for tax purposes? So, to answer your question, anytime you take money, whether it's from a rental property or any investment that you're making, the cash is sitting in your account, so there's a couple things you can do with it. You can reinvest it.
Rachel Stolrow: Into another investment.
Rachel Stolrow: You can take a distribution, which is… this is the question that you're asking, which would be done through a distribution form.
Rachel Stolrow: Or you can move the money to a different custodian. Maybe you're looking to do some sort of public investments, and you don't want the cash sitting there. So those are the three options. You can take that profit. I would be sure
Rachel Stolrow: to know your age, right? If you take it too early, you could be running the risk of having additional taxes, so…
Rachel Stolrow: Again, keeping it within your account, knowing the rules, and when you can take that distribution.
Rachel Stolrow: Do I need to have a 1099 for tax purposes? Any tax-related questions, I would ask a tax advisor in relation to your property, what you're looking to do, maybe it's a long or short-term rental,
Rachel Stolrow: Things of that nature, to see if there's anything that you would need to plan for.
Rachel Stolrow: So, let me pull that back up here. Can you manage your own rental properties? I'm not referring to anything hands-on. Yes, it's kind of gray, but you can, essentially, clients do…
Rachel Stolrow: manage their own property. I would reach out specifically,
Rachel Stolrow: To go in depth a little bit more about your question, your rental property, and what you're looking to do before, you know, taking anything, as word, and making sure that we're really answering your question properly, and if need be, referring you to maybe somebody who can do a little bit more of a deep dive.
Rachel Stolrow: So, do we charge fees for cash in the account? No, we do not. We do not charge any fees for cash sitting in the account. So, if you're making money on an investment, if you transfer over $100,000 and you're not doing anything with that money yet because you're looking for a property, and we keep talking about rental properties, it's one of the most common investments.
Rachel Stolrow: But just really any investment as a whole, if you have cash sitting in your account, you are not being charged on that cash. We only charge
Rachel Stolrow: based on the value of the asset that we're custodying. In an example, you have $100,000 in your account, $50,000 is sent to an investment, $50,000 is in your account. We're only charging for the $50,000 that we're…
Rachel Stolrow: We're custaining the asset for.
Rachel Stolrow: Next question. What do you need to be careful of when enjoining angel investment groups, and how do you handle due diligence? Again, just really doing your own due diligence. I know this really isn't answering your question, but I would work with
Rachel Stolrow: Somebody who is seasoned in this type of investing, a tax advisor who's seasoned, really, in alternative investments, because they'll be able to go through all of those
Rachel Stolrow: Questions for you, and at least the major red flags that may come up, and how to
Rachel Stolrow: Properly vet them.
Rachel Stolrow: Okay. Next question.
Rachel Stolrow: can I personally occupy a property purchase through my self-directed IRA if I'm retired? Is there a specific period of time that I have to wait? The period of time is…
Rachel Stolrow: The entire time that it's within your plan, even if
Rachel Stolrow: 5% is held by your IRA and 95% is held by you or someone else, you still cannot, should not be staying in that property. You can purchase a property within your retirement plan.
Rachel Stolrow: And you can take a distribution, which is called in-kind, where you, instead of getting a cash monetary distribution, you are now distributing out that property to yourself personally, so you can 100% own it and live in or use that property when you want.
Rachel Stolrow: But at no time while it's owned in all or some of your retirement plan should you be
Rachel Stolrow: Living in or occupying that home.
Rachel Stolrow: When does Entrust let me know about the value of precious metals distribution so I can estimate taxes due? What… when does Entrust know… let me know the value of the IRA distribution so I can know taxes due? Sorry, I'm just rereading that question to myself, so…
Rachel Stolrow: Number one, if you hold medals in your account, we do pull
Rachel Stolrow: you know, it's, I think it's value, bullionvalue.org, something like that. We pull prior day values of metals so that you can at least get a good baseline of what the asset is worth in your account.
Rachel Stolrow: So, when we… let me know how the precious metals distribution… I… again, I… I would almost tell you without a shadow of a doubt that we will go through with you the value, the exact value of your investment.
Rachel Stolrow: before doing a distribution, before doing an in-kind rollover, before doing a Roth conversion, so that that value is accurate in terms of taxes due. Again, we're not a tax advisor, so I would work with a specific tax advisor so they can
Rachel Stolrow: Evaluate your, your income, your financial situation, and give you appropriate taxes based on the distribution that you took.
Rachel Stolrow: I didn't trust.
Rachel Stolrow: Nor can you do any work or remodel yourself. So, in relation to, real estate, no, you cannot. There's no sweat equity allowed on the home, so even if you can clean the windows for free, mow the lawn for free, do some plumbing for free, you cannot put any sweat equity into this home as well, that you may own within your plan.
Rachel Stolrow: I have an established trust. How do I apply this to my precious metals account? Please do elaborate. I'd love for you to send a follow-up question to let me know more about this established trust. Are you talking about a trust account, or do you have an interest?
Rachel Stolrow: plan… Please elaborate a little bit more on that question.
Rachel Stolrow: So, the next question is, if I don't have sufficient funds to maintain my rental property that was purchased through my self-directed IRA, and I'm now retired, and I don't have any other taxable form of income, can I use my savings if I invest these funds into my self-directed?
Rachel Stolrow: IRA, so you would be limited to transferring or rolling over from another custodian.
Rachel Stolrow: Making the contribution that you can make on an annual basis.
Rachel Stolrow: Those would be your…
Rachel Stolrow: I don't, too, maintain the rental property that I've purchased. Yeah, you are very limited, or again, looking into maybe some sort of non-recourse loan.
Rachel Stolrow: I took an in-kind distribution in May, and the only information I have
Rachel Stolrow: is valued… I would assume it… Okay.
Rachel Stolrow: Okay, so somebody said they took an in-kind distribution in September. The only information that they have is the value of their last quarterly statement, I'm assuming, for this investment.
Rachel Stolrow: Oh, sorry, it just… the question ran away for me. I'd like to estimate taxes now, and not sure what value to use. Seems like interest would know the…
Rachel Stolrow: the value at time of distribution. So, I hope I'm understanding this right, and please do add a follow-up question if I'm not. Any time that you'll do an in…
Rachel Stolrow: a distribution, or whether that's in-kind or not, or regular, cash distribution, will need a value, especially of this asset, so I would…
Rachel Stolrow: Assume that, yes, we would have the most recent value, but, the last portion…
Rachel Stolrow: I'd like to estimate my taxes now, and not sure what value to use. Again, I would work with a tax advisor. They are going to know your financial situation and income best to know what taxes will be due based on, any events that you've done, like taking a distribution.
Rachel Stolrow: Next question.
Rachel Stolrow: It's about rental property management, essentially to have the role as typical property manager for a rental, i.e. collect rents, take calls, emails, arrange vendor.
Rachel Stolrow: all remotely, is this providing a service in itself, Karen? That's a really great question, and I would say it's more of a gray area.
Rachel Stolrow: Do clients do it? Sure. But there are quite a few clients who do hire a rental property management company to handle all of these,
Rachel Stolrow: All of these ongoing tasks for your property, like vendor management, taking calls, emails, anything without a shadow of a doubt, again, would be…
Rachel Stolrow: that would incur a fee, even if it's, like, posting your property on Airbnb. Small fees that are due all need to come from the plan. So I hope that answers your question.
Rachel Stolrow: Wow, this was the most active chat that I've had, and it… it was probably our most, our shortest segment, just on the top 5, mistakes that we see, so it's really nice to see such an active audience. I don't see any additional questions for now, but like I mentioned, we have very…
Rachel Stolrow: Very seasoned staff that are willing, ready, and able to take any questions that you have, or defer you to, maybe the appropriate party that should be answering these questions based on you personally and your financial situation, so…
Rachel Stolrow: Please do feel free to reach out anytime that you have questions. We're here to help, we're here to answer those self-directed IRA questions for you. And thank you for tuning in. Please stay tuned for the next webinar coming up next month.