Presents:

David DugganSenior Account Executive

855-499-1653d.duggan@trustetc.com

David DugganSenior Account Executive

855-499-1653d.duggan@trustetc.com

Assembling Your Private Bank: Leveraging Self-Directed IRAs

• This material is presented with the understanding that Equity Trust Company/Equity University (“ETC”), its representatives, officers affiliates and clients have not been engaged in rendering specific planning, investing, or professional services.

• Questions relevant to your specific tax, investment, accounting, legal, estate or planning needs should be addressed to practicing members of those professions only after fully disclosing all relevant and material facts regarding your specific situation. ETC does not endorse any speaker or presenter before you today. Nor does it endorse any printed materials belonging to any third party and provided herein.

• The information, ideas, suggestions, and strategies contained herein have been developed from sources, including publications and research, that are considered and believed to be reliable, but cannot be guaranteed insofar as they apply to any Particular taxpayer or individual desiring to establish an asset protection, estate planning, investment, retirement, education or tax plan. Moreover, because of the technical nature of the material and the fact that the laws and the markets are never static, but ever changing, the assistance of a competent, qualified professional is recommended when implementing any ideas discussed today.

• ETC and all its representatives specifically disclaim any liability, loss, or risk, personal or otherwise, incurred as a consequence directly or indirectly of the use and application of any of the techniques or contents of this material.

• ETC, all its affiliates, representatives, officers do not provide any legal or tax advice. We provide education on topics, such as building wealth through Self Directed Retirement Accounts, and recommend that you work with a professional as to specific guidance for your investments.

DisclaimerDisclaimer

What You Will Learn Today

• 7 Tax-Exempt Accounts – Compounding Interest• Real Estate and Alternative Investment Options• Financing Options – Partnering Strategies • Assembling a Private Bank of IRA Investors• Getting Started – Transaction Process/Case Studies

www.IRS.gov

P = principal amount (the initial amount you borrow or deposit) r = annual rate of interest (as a decimal)t = number of years the amount is deposited or borrowed for.A = amount of money accumulated after n years, including interest. n = number of times the interest is compounded per year 

IRA vs. Non-IRA Investing

Tax Savings $141,074

Calculator Access: www.TrustETC.com

Individual Accounts• Traditional IRA • Roth IRASmall Business Plans• SEP• SIMPLE• Solo 401(k) Alternative Accounts • Coverdell Education Savings Account (CESA)• Health Savings Account (HSA)

The (7) Tax-Exempt Self-Directed Account TypesThe (7) Tax-Exempt Self-Directed Account Types

Alternative Investments Alternative Investments

REAL ESTATE • Single Family Homes

• Buy and Hold • Rehab and Resell

• Apartment Complexes • Mortgage Notes/Trust Deeds• Non-Performing Notes• Tax Liens/Deeds• Real Estate Options • Wholesaling • Subject-to’s

• Commercial Real Estate • Vacation Rentals• Raw Land – Developed, Undeveloped and Pre-Developed• Mobile Homes• LLC LP, C-Corp - Real Estate or Non Real Estate• Private Placements: Debt and Equity

• Oil and Gas • Precious Metals • Factoring • FOREX • Equipment Leasing • Show Horses

Alternative Investments Alternative Investments

Funding the Account:1) Rollover from 401(k), 403(b), 457, ESOP2) Transfer from an existing Traditional IRA3) Out-of-pocket contribution 2014

•$5,500 $5,500 contribution when under 50 •$6,500 $6,500 when 50 and over

Irrespective of earnings/rollovers/transfers

Traditional IRAIRA Tax -DeferredTax -Deferred

Distributions for personal use may Distributions for personal use may begin at 59 ½ - premature distributions begin at 59 ½ - premature distributions

result in a 10% penalty result in a 10% penalty

• Inception Year: 1998• After tax Individual Retirement

Arrangement (IRA)• Eligibility Requirements:

• Earned Income • Modified Adjusted Gross Income (MAGI) :

• Single Filer Phase Out: 116k-131k • Married Filing Jointly Phase Out: 183k-1913k

• Solution: Solution: Contribute to a Traditional/SEP Contribute to a Traditional/SEP convert to the Roth IRAconvert to the Roth IRA

Roth IRAIRA Tax-Free William V. Roth , Jr.

Senator from Delaware

Funding Your Roth IRA

Roth IRA Contribution:- Cannot exceed $5,500$5,500 when under 50 and $6,500$6,500 when 50 and over (2014)

Roth IRA Transfer:- Partial or full trustee to trustee transfer

Conversion from tax-deferred account:- NO MAGI limits for conversions (100k pre

2010) - Convert from Traditional IRA- Convert from 401(k) - Convert from SEP IRA - Convert from SIMPLE IRA

Internal Revenue Service

Please note: Amount converted is added to your ordinary income

$100,000$100,000

Roth IRA

$100,000$100,000

$20,00020% effective tax rate

Traditional IRA/401(k)

Transitioning Traditional IRA assets (tax-deferred) to a Roth IRA (tax-free)

RothRoth Conversion Conversion

Internal Revenue Service

Please note: Amount converted is added to your ordinary income

$100,000$100,000

Roth IRA

$50,000$50,000

$10,00020% effective tax rate

Traditional IRA/401(k)

PartialPartial Conversion Conversion Convert In Stages

In-Kind Asset Conversion

Internal Revenue Service

Please note: Amount converted is added to your ordinary income

$50,000$50,000

Roth IRA

$50,000$10,000

20% effective tax rate

Traditional IRA/401(k)

Finance the DealMethods to

1)Sole Ownership 2)Partner/Undivided Interest 3)Debt Finance – (Non-Recourse Loan)

Disqualified Persons and Prohibited Transactions• Your IRA cannot transact business with a disqualified person• What constitutes a transaction?

Defined in the internal revenue code as a: Sale…,lease…,lending of money or other extension of credit…, furnishing of goods, services, and facilities…

IRC 4975• Account Owner (Fiduciary)• Spouse• Decedents• Ascendants • Spouses of children• Entities - LLC, C-Corp, LP owned 50% or greater by

disqualified persons• An officer, director, or 10% or more

shareholder, or highly compensated employee (earns 10% or greater of the companies wages) of a company owned by the IRA owner or other disqualified persons

Disqualified Persons

• Placed property under contract for $105,000• May 16, 2013 - requested earnest money check for

$1,000 from her Roth IRA to open escrow • June 7, 2013 – sold property to an investor buyer she

met at her local REIA• Jan’s IRA received a check for $38,960.93 (after

expenses)

• $38,960.93 - $1,000 Deposit = $37,960.93 TAX-FREE • Duration of Investment: Less than 30 days

Jan - St. Louis, MO Wholesale

Wholesale Overview16688 Kehrsgrove

Placed property under contract for $406,173 - Equity Trust Company Custodian FBO Act#ZXXXXXX, Roth IRA or Assigns to…

July 11, 2014 – requested earnest money check for $1,000 from my IRA to open escrow

August 28, 2014 – sold property for $450,000 to investor/buyer

IRA received a check for $44,589.21 (after expenses)

$44,589.21 - $1,000 Deposit = $43,589.21 TAX-FREE

Duration of Investment: less than 60 days

55 Ladue Estates Project Overview

• July 24, 2013 – bought property for $310,000• July 29, 2013 to January 27, 2014 – scheduled 5 payments to contractor• June 13, 2014 – sold renovated property for $767,000• IRAs received $163,806 (after all expenses) - duration

of Investment: 11 months

55 Ladue Estates Purchase

Gary’s Roth IRA – 55%EMD: $1,650EMD: $1,650$168,705.86$168,705.86

Brittany’s Roth IRA – 3%EMD: $90EMD: $90$9,202.14 $9,202.14

Jan’s Roth IRA – 42%EMD: $1,260EMD: $1,260$125,829.92$125,829.92

$306,737

55 Ladue Estates Renovations

Gary’s Roth IRA – 55%$163,051.35$163,051.35

5 Checks5 Checks

Brittany’s Roth IRA – 3%$8,893.71$8,893.715 Checks5 Checks

Jan’s Roth IRA – 42%$124,511.94$124,511.94

5 Checks5 Checks

Renovation Cost: $296,457

55 Ladue Estates Sale

Gary’s Roth IRA – 55%$421,850

$90,093.30 TAX FREE

Brittany’s Roth IRA – 3%$23,210

$4,914.18 TAX FREE

Jan’s Roth IRA – 42%$322,140

$68,798.52 TAX FREE

Proceeds from Sale: $767,000

IRAs received $163,806 (after all expenses)

CESA Coverdell Education Savings Account

Contributions• $2,000 Maximum (Non-Deductible)• Until Age 18• Growth is 100% Tax-Free

Withdrawals• Qualified Higher Education Expense (By Age 30)

• Tax & Penalty Free• Accredited College, University, Vocational

or Private Grade School

• Cincinnati, OH • Purchased using daughter's CESA account

Bob – CESA Investment

• Purchased in daughter's CESA account in Dec 2012 for $5,000

• Sold in February for $15,600 with owner financing on a land contract with $695 down

• $180.84 PI/month for 10 years 8% interest ($15,600 sale price $225PITI) – $2,170 AnnuallyAnnually

• IRR = 48.57%

Bob – CESA Investment

Individual Accounts• Traditional IRA • Roth IRASmall Business Plans• SEP• SIMPLE• Solo 401(k) Alternative Accounts • Coverdell Education Savings Account (CESA)• Health Savings Account (HSA)

The (7) Tax-Exempt Self-Directed Account TypesThe (7) Tax-Exempt Self-Directed Account Types

Step: 1

Step: 2

Step: 3

Transaction Processing

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