All Forum Posts by: Bernard Reisz

@Steve C. To provide tax benefits, and not tax penalties, a QRP has to be "Qualified." To be Qualified it must meet the definitions of the Tax Code in formation and operation. Having a set of IRS approved documents is only 1 small part of a plan actually being "qualified." Therefore, those for whom subscribing to get a set of IRS approved QRP documents would not result in a Qualified Retirement Plan may be better served by using an SDIRA. Of course, no tax is better than a little tax... but a little tax is better than a lot of tax. 

@Steve C. The determining factor regarding what type of self-directed account to establish is very seldom UBIT. In addition to great info provide by @Brian Eastman, following are some common fallacies encountered and, sometimes, widely disseminated.

• Qualified Retirement Plans (abbreviated to QRP and, for purposes of this post, includes "Solo 401k") are exempt from all UBIT. UBIT applies to all tax-sheltered vehicles. QRPs have an important - but limited - exemption for "real estate acquisition indebtedness" and, very importantly, that exemption is not always applicable.
• The tax rate on UDFI is 37%+. The effective tax rate will usually be far, far lower due to the way it UBIT is calculated. In fact, in many, many instances UBIT never materializes until the asset sale. If-and-when applicable to a sale, the tax rate that applies is the far lower cap gains rate, not trust rates.
• The key factor in selecting a tax-sheltered self-directed retirement account is UBIT. This is erroneous because (a) a non-compliant QRP can result in far more adverse consequences than UBIT liability and (b) UBIT coming from UDFI does not override the financial benefits of using an SDIRA to invest in real estate. 

There are a plethora of self-directed retirement account vehicles available, each of which has its place. It's just a matter of making well-informed choices to get the best results for yourself.

I have heard of sellers of self-directed retirement plan documents that "qualify" folks as "self employed," for purposes of sponsoring a 401k, by signing them up as affiliate marketing partners. Of course, something of that nature should be always be discussed with an objective professional.

@Brian Eastman Don't you believe in the adage "you get what you pay for?!" 

(Couldn't resist injecting some humor here. Great post by you, as always!)

@Alex Shaughnessy Get in touch with @Yonah Weiss. I've found that the cost difference between an algorithmic cost seg study and an engineered cost seg study is not nearly as pronounced as you might expect, and the added value for the incremental cost can make the engineered study a "no brainer."

@Mark Pedroza Honored by the mention! 

Some great names mentioned here, but if you want incredible expertise along with the ultimate sense of humor @Michael Plaks is your man!

@Pooja Thakur Rahman Go-to person for anything cost seg related is @Yonah Weiss, and being that he's so well connected, can very likely help you find a property manager and contractors.

@Tina Sinha

@Yonah Weiss is the a recognized nationwide cost seg expert and you'll benefit immensely from connecting with him to discuss your needs. 

@Daniel Hyman Honored! @biggerpockets has to create some additional "reactions," as your comment deserves more than just a "vote"! :) 

@Mark Payne Connect w/ @Yonah Weiss. He's got the cost seg & industry knowledge to help.