Weighing Long-Term Capital Gains Against Ordinary Income

August 6, 2013

Article by Glen Mather:

Why would anyone want to trade a 15% capital gain tax rate for a 22% marginal income tax rate?

During a recent presentation to a group of CPAs, I was asked this rather obvious question. We were in the process of discussing the relative merits of investing an IRA into rental housing.

For the investor that purchases with after tax money outside an IRA, certain tax advantages accrue largely based on the income and tax situation of the individual. If passive losses are able to offset ordinary income, an additional benefit can arise. However, the assumed disadvantage of the IRA investment in a similar real estate asset may not be accurate, based on the individual facts of the case.

Important variables to consider:

  • The age of the investor
  • The anticipated number of years until the investment will start to be distributed
  • Estimated cash flow of earnings, if any
  • Estimated profits upon sale of the asset
  • How long each asset will be held
  • How the proceeds from the sale of the investment will be re-invested
  • The marginal tax rate of the investor at the time investment revenue is received
  • The estimated marginal tax rate of the individual when the funds are to be distributed

Unless investments are in a fixed-return instrument, predicting investment results is a difficult task, and certainly forecasting individual tax rates in future periods is next to impossible. For the real estate investor using non-IRA funds, a 1031 exchange process may be a great choice if the timing of the sale and purchase permits. It will ensure that all of the proceeds of a sale can be rolled into the basis of the new property while forestalling capital gains until the sale of the final property.

The capital gain rates for those with federal marginal tax rates of 35% and 39.6% have been raised to 18.8% and 23.8% due to 2013 tax law changes and the affordable health care surcharge. Avoiding or deferring these higher charges for those in the upper brackets are now more necessary than ever for those outside IRAs. Indeed, these new LTCG brackets tilt the advantages more heavily to the benefit of using IRA monies for investments.

With an IRA, as long as the real estate investment is not leveraged, all gains are deferred until distribution, and then it’s taxed as ordinary income. Should tax rates stay constant (which they never do), generally the majority of retirees will enjoy a lower rate due to diminished earnings.

Roth IRAs change the landscape considerably. Roths are attractive for those who believe their investment performance will be able to recoup the tax costs of conversion or contribution, and for those willing to bet that future tax rates will be equal or higher in retirement than their current rates.

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Orlando, Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.

Wheelchair Distribution Trip to El Salvador

August 5, 2013

Last Saturday I was surrounded by the happiest people in the world. Five-year-old polio patients, legless landmine victims, amputees, and those with other infirmities shuffled on crutches or were carried by family members into the courtyard. Although most were from the poorest of backgrounds, on this day they all wore their best clothes and held their heads high.

This was the day that their life would be changed.

They were about to receive their first wheelchair.

The line outside the art museum in San Salvador stretched around the block – the queue lengthening after each diesel-belching bus unloaded. Inside the museum’s courtyard, more than 280 gleaming red wheelchairs were unpacked, awaiting new owners. A local Rotarian called each name from a clipboard into the megaphone causing a chain reaction among fellow workers to assist the recipient up a steep ramp to the official wheelchair distribution area.

After brief introductions in fragmented Spanglish, NuView IRA volunteers, together with other Rotary Club members, gently lowered our new friends into their gift of mobility. The emotions in that moment seemed to erase the challenge of language as tears of gladness and appreciation led to smiles and hugs.

Five-year-old Maria said she heard that you can dance once finally in a wheelchair, which she then proceeded to happily try. Edwin, an eight-year-old with legs that will never be able to carry him, exclaimed he want to be a soldier now that he has his chair. Antonio, a man at the young age of 101, received his first chair alongside his wife, Maria, a feisty 79-year-old, and he plans to live a much more active life back in his village. Hundreds of other stories have been stitched together in the fabric of our minds after participating in this distribution last week in El Salvador.

Thanks to many of our friends, colleagues and clients, and to all of those that participated in the 2013 Hero Games to raise money for the Wheelchair Foundation, hundreds of lives have been changed forever. It is said it is far more blessed to give than to receive, and this past week was an awesome reminder of the power of sharing just a small portion that which we so frequently take for granted.

Stay tuned for our second annual Hero Games event coming next spring so that you may be part of the next chapter in this wonderful adventure.

God Bless,


3 Simple Ways to Worry Less about Retirement

July 24, 2013

The Employee Benefit Research Institute’s 2013 Retirement Confidence Survey broke down the percentages of American confidence in being able to afford a comfortable retirement. While more than half of Americans express some level of confidence in their ability to afford a comfortable retirement, (13% are very confident and 38% are somewhat confident), 21% are not too confident, and 28% are not at all confident. In addition, the percentage of those “not at all confident” is at the highest level it has ever been in the 23 years this survey has been administered.

Despite a brighter economic outlook this year than last, experts believe that one of the main reasons retirement confidence remains low is that people are beginning to realize just how much they need to save for their retirement. While it’s best to start saving for retirement as early as possible, what about those who reach their 40s before they start saving? Here are a few simple things you can do to make saving for retirement a little easier:

Cut back your spending: An easy way to worry less about retirement is to decrease your spending. Try cutting back on small purchases first and see how much you miss them, (or maybe don’t miss them at all). You may need to ask yourself – “Would I rather spend $60 on coffee a month or use that money for retirement?”

Stay healthy: Health care is a big expense during retirement. Even though a large part of your health is genetic, there are still many good habits you can practice in order to maintain a good weight and good overall health. Eating right, exercising often, drinking plenty of water, and getting enough sleep at night are just a few things you can do to stay healthy.

Make a plan to pay off your mortgage: A mortgage is one of the biggest monthly household expenses. If you pay off your mortgage before retirement, it will then be much easier to make ends meet. You can even use one of the various online mortgage calculators to time your mortgage payoff to your retirement date.

Let’s face it, retiring comfortably can be expensive. If you’re looking to take control of your retirement and start building a healthy retirement nest egg, call our experienced self-directed IRA administrative staff at 407-367-3472 to discuss your investment options within a self-directed IRA.

Rebounding Real Estate and IRAs

June 26, 2013

Imagine taking advantage of the continual rebounds the U.S. real estate market is experiencing, all from the comfort of your retirement account.

“We have a continued, gradual recovery,” said Brian Jones, a senior U.S. economist for New York’s Societe Generale in a recent Bloomberg story. The article went on to detail specific data on property values, but stated home prices overall rose by the most in seven years as the recovery in residential real estate continues to gain momentum.

Shortly after that news, Yahoo! Homes quoted a RealtyTrac report that listed the top 25 U.S. markets for flipping homes — including some that offer more than 50% gross returns. Luckily for our local Floridians, Orlando and its neighbor Tampa made it to the top of the heap.

What exactly does this mean for you and your self-directed IRA? It means it’s time to earn some returns.

For years now people have been waiting to dive back into the realm of real estate investing out of fear of another housing bubble burst. In reality, we are far from it. According to Daren Blomquist of RealtyTrac, Orlando had one of the worst foreclosure rates in America throughout the past five years, but its average home price rebounded at a 12% annual rate during the beginning of this year. Now seems a better time than any to invest your self-directed IRA funds into something malleable like the recuperating housing market.

“There is a 2.68 month supply as of May left. That is if no new houses list and none expire or are withdrawn, we will sell through our inventory in 2.68 months,” said Andy Tolbert, a short sale specialist and the director of programing and membership for the Investors Resource Center chapter in Central Florida. Tolbert went on to explain that the numbers are proof of a strengthening market.

Here at NuView, we offer countless educational classes on how easy it is to introduce the booming real estate market to your self-directed IRA. Even if you are familiar with holding alternative assets and you just want to know more, our team is willing and able to help you understand every aspect of your self-directed IRA. Knowledge is power. Knowledge about the real estate market gives you an advantage that could help make investments more profitable. To learn more about your options, give our expert self-directed IRA administrators a call today at 407-367-3472.

Making a Dent with Community Service

May 29, 2013

How many times have you seen a bedraggled sign toting person at the end of an exit ramp and wondered, what is his or her story? If I hand them a dollar, will it help provide a meal or a bed, or be used for less honorable purposes. In traveling to my office in downtown Chicago, for the four block walk from the train, I’m accosted by a dozen needy citizens, each holding out a hand or cup and a sign. What is a caring person to do?

God gives us clear directions about how we are to treat those less fortunate: “Give generously to them and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to. There will always be poor people in the land.” (Deut 15:10,11)

It’s a bit confusing though, because we can run out of funds long before we make a dent in fulfilling the needs of others either with our dollars or time doing community service.

Serving others certainly embraces the idea of monetary contributions. Yet, true service demands much more of us; connection with the people that need our help. On that front, we all have an equal amount of capital to deploy.

Two years ago, the NuView staff spent several days defining the collective values that we share as an organization.  Particularly poignant was the idea that we have a desire to serve others – not just in the workplace, but in the community as well.

While some of the NuView staff were always first in line to sign up for the myriad of charitable community service activities in Central Florida, others held back a bit.  To provide a nudge, we decided to incentivize the behavior with a company- wide bonus if each employee donated at least 15 hours per quarter on any activity that benefited someone less fortunate.

How are we doing?  Well, it’s a bit embarrassing to confess that my staff is running laps around me, donating their time to the Wheelchair Foundation, Shephards Hope, Ronald McDonald House, Feeding Children Everywhere, and many more.

In the book of Matthew, Jesus said, when you give to the needy, do not let your right hand know what the left is doing.  What I have found is that public affirmation is unnecessary – the satisfaction of serving others seems to be quite enough.

So, we hope to see you at the next walk-a-thon, tutoring session, or at the local health clinic. We also enjoy hearing about the ways that our friends and clients serve others, and will be happy to join you in your ventures of community service as well.

Indeed, the poor will always be among us – perhaps just to teach us about ourselves. Although the needs are large, join us in helping make the dent just a little bit bigger.

Lars Houmann of Florida Hospital Joins NuView IRA Advisory Board

May 20, 2013

Article by Maria Hernandez, NuView IRA, Inc.:

Lake Mary, Florida – April 29, 2013

NuView IRA, Inc. a leading self-directed IRA administrator announced today the addition of Lars Houmann, President and CEO of Florida Hospital to the NuView Advisory Board. With more than 20 years of economic development experience and various leadership roles within Florida Hospital, Lars will provide insight on how to better serve clients, employees and community.

Houmann’s accomplishments include the addition of the state-of-the-art medical center near Disney – Celebration Hospital, providing a blueprint for innovative delivery of medical services that has inspired hospital administrators internationally.  Lars’ current projects include the development of a 172 acre Health Village in downtown Orlando.

Under his leadership since 2006, Florida Hospital has continued rapid growth, reporting revenues of over $2.2B for the last period. Florida Hospital has also set the standard for excellence and being named by US News and World Report as the the number one hospital in Orlando.

“We are extremely pleased and honored that Lars has agreed to be part of our advisory group,” said Glen Mather, NuView President.   “His innovative ideas and his legacy of service to his community are attributes that cannot help but be an inspiration to us all.” When asked why he serves on so many boards, including chairing the Florida Chamber Board of Directors as well as the Metro Orlando Economic Development Commission, Lars said “I do it because it makes a difference.”

Houmann will join three other business leaders on the NuView Advisory Board;  John Ritenour, Founder and Chairman of Insurance Office of America, Charles Gray, Founder and Chairman of Gray-Robinson law firm, and Jerry Ross, Director of the National Entrepreneurial Center.

About NuView IRA, Inc.

NuView is a leading administrator of self-directed IRAs based in Lake Mary, Florida, and through its  affiliates, holds over $600M in retirement funds.  Since 2003, thousands of NuView clients have been able to self-direct their IRAs and Individual 401(k) plans into real estate, notes, mortgages, private placements, precious metals, and much more.


Lars Houmann, CEO of Florida Hospital, joins NuView IRA, Inc. Advisory Board providing insight and experience in customer service, employee development and community involvement.

Do You Enjoy DIY Projects? Try a Self-Directed IRA

May 2, 2013

People are always looking for the gratification of successfully completing a do-it-yourself (DIY) project. Even if it’s something as simple as painting an old bookshelf to look new, building something on your own often creates a satisfying feeling. If you’re on Pinterest, one of the most popular ideas among users of this inspirational social media platform is do-it-yourself projects. Users pin DIY project ideas ranging from how to modernize your kitchen to designing your own flower arrangements at your wedding.

According to an article in Psychology Today, building something yourself also increases the item’s value. “The act of building something, putting your own blood and sweat into a physical object, seems to imbue it with additional value above and beyond its inherent quality,” said Travis J. Carter, Ph. D., author of the article. In fact, this is rumored to be one of the reasons why IKEA requires customers to assemble their purchased furniture.

So, how does this relate to IRAs and retirement planning? Banks, brokerages, and mutual fund companies are able to open an IRA for you and act as custodian of your retirement funds, helping you invest in the traditional bank, brokerage, and mutual fund products. However, for those who would like to put their own personal stamp on their IRA and customize their investment choices to ones they are most familiar with, there is a do-it-yourself IRA known as a self-directed IRA.

A self-directed IRA opens up a whole range of investment products that can be purchased inside an IRA beyond the stock market. Since many of us have specialized knowledge that could help us make niche investments in a self-directed IRA, this type of IRA becomes very appealing to the DIY investor. The benefits that accrue may be far more than just psychological.

Give our Florida self-directed IRA administrators a call today at 407-367-3472 to learn more about your IRA options including self-directed IRAs and real estate IRAs! As always, we wish you all the best in your investments!

There’s an App for That…Simplify Your Business and Your Life with Google Drive

April 23, 2013

Guest article by Tom Jelneck:

About two years ago, my company had a problem.  We had way too many digital assets in way too many places.  Where’s that Photoshop file? Where did the press release draft get stored? This huge waste of time trying to hunt down digital files is not only a headache, but costs us money.  As our businesses create more and more digital files, the need for a one stop file repository is becoming mission critical in order to keep efficiency at peak levels. If you’re not crazy about housing power-sucking, maintenance hungry servers to store your data, keep reading.

Enter Google.  The search engine giant Google has developed some amazing tools that are making all of our lives much more efficient and manageable. Google has created a platform where you can create, collaborate, share, print and alter documents, spreadsheets, presentations and more through it’s cloud service Google Drive. All docs, email, calendars, etc., can be accessed from your desktop, your smartphone, your tablet, etc., which means you’ll never need to call your secretary back at the office to have them pull a file.  All of your files, emails, appointments, to-do lists, etc., all at your fingertips, 24/7.

Key Features:

  • Ability to upload and store multiple file formats in your Drive (you can upload Word docs, PDFs, Excel spreadsheets, etc., and store them in Google Drive).
  • Ability to manage who in your organization has access to what.
  • Ability to manage how much data space users in your organization are using.
  • Ability to collaborate and share documents in real time.
  • Ability to sync online Drive with your local PC or Mac.

The Bottom Line:

If you need to streamline and simplify your business, consider Google Drive. It’s free, easy to use, robust and, best of all, doesn’t require hiring an expensive IT pro to keep it running smoothly.

Setting up Google Drive is simple, and it offers solid tech support to get you up and running.  Google continues to expand with products and improvements on integral tools (like Search and Maps), and it will continue to innovate and create making it a robust technology partner for any business.

For more technology and Internet marketing tips, visit http://tomjelneck.com.

Land Trusts to Hold Florida Real Estate for a Self-Directed IRA

Guest article by Joseph Seagle:

One of the benefits of holding assets in an IRA is that the assets in the account are not subject to claims of the beneficiary’s creditors. This makes the IRA an asset protection tool in addition to its benefits as a retirement planning tool. Without careful planning, this protection may be thwarted.

A common scenario for lawyers: The client purchased a home directly into his self-directed IRA, using IRA funds. After renovating the property, he flipped it for a nice $27,000.00 tax-free profit within the real estate IRA. Frantically, months later, he calls his attorney who advised him during the purchase. His IRA custodian was just served with a lawsuit alleging that the seller-IRA failed to disclose latent defects in the property such as PB plumbing in the walls and asbestos ducts running under insulation in the attic. While facts are disputed, the IRA is going to have to defend the lawsuit at great expense. If it loses, the IRA’s other assets are up for grabs. The lawyer quickly reviews his malpractice insurance policy for coverage and notification requirements.

A prudent attorney will advise the client to never purchase real estate directly into the IRA’s name. Instead, an entity should be inserted between the IRA and the real estate. To do this, many attorneys will recommend that the IRA’s custodian be the sole member of an LLC. However, the asset protection abilities of the single-member LLC have been called into question by recent court decisions, and the lack of confidentiality may make the IRA a target nonetheless.

A Florida land trust holding title to the property would be cheaper, faster, and provides anonymity of ownership. A third party independent land trustee ensures the beneficiaries’ anonymity and confidentiality. The IRA custodian would be the sole beneficiary of the land trust, or it could be a co-beneficiary with other entities, individuals, or even other IRA custodial accounts. A simple co-beneficiary agreement would be used to spell out the sharing of responsibilities and profits. And, better yet, in this case, the lawsuit would have been filed against the land trust whose only asset was the property it had just sold to the buyers, negating the need to defend the lawsuit.

Keeping Your Money Working for Your Retirement

April 17, 2013

Each morning as our bare feet hit the floor beside our bed, we are in fact one day closer to retirement age.  Those of us who are W2 employees may have our employers set aside a portion of our earnings in our company retirement plans.  We choose the funds we are offered and then hope that earnings will outpace the expected inflationary future.

Trouble is, often our retirement savings don’t work as hard as we do – largely around the choices we make.  Many try to time the market, pulling their money out of stocks and bonds at “just the right time”.  The trouble with the market-timing strategy is that there are no earnings while on the sidelines.  With a self-directed IRA from NuView IRA, you have more ways to keep your money invested than simply riding the ups and downs of the stock market.

For example, one of our clients owns rental properties and lends money from his real estate IRA.  Both of those categories of investments produce a cash flow into his custodial IRA account. The $2,300 per month payments received by his IRA are aggregated into a $10,000 fund that is used, combined with a hard money lender, to purchase mortgage notes.

Another investor who prefers to purchase tax liens has addressed their use of cash differently. She has a brokerage account opened under the Administration of NuView and requests a transfer of the cash as it moves into her IRA. She can invest in the public markets, building funds for the next tax-lien auction.

Many of us have multiple IRA accounts, perhaps a Roth, Traditional or even an HSA.  The ability to partner those funds together into one investment can also be a great tool for smaller balance accounts.  For example, a NuView client can purchase real estate through a tenancy in common titling, partnering several accounts together. A property priced at $50,000 can be purchased with 10% of Roth IRA funds and 90% of traditional IRA funds (titling would be NuView IRA FBO Client Roth IRA as to an undivided 10% and Nuview IRA FBO Client Traditional IRA as to an undivided 90%).

Saving consistently and investing wisely is likely the only formula to achieve your dream of retirement.  Unless you are fortunate enough to be retired, you likely spend most days working for your present.  Make sure your IRA is working as well for your future.

Glen Mather is President of NuView IRA, Inc., a national leading self-directed IRA administrator based out of Orlando, Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.