How to Invest in a Self-Directed IRA

Estimated reading time: 3 minutes

Investing with a Self-Directed IRA is a great way to make sure you have enough money saved for retirement while having the ability to invest in assets you’re familiar with. IRAs allow you to invest your savings and build your wealth over time. However, it might seem more difficult to use an IRA as opposed to investing with your personal funds. The good news is that if you have a knowledgeable custodian that is familiar with the industry, they can make the investing process a lot smoother and simpler! Investing with a Self-Directed IRA can be broken down into 5 steps.

 

What is the Difference Between a Traditional IRA and a Self-Directed IRA?

With a traditional IRA, a custodian manages your money for you and makes all decisions regarding how your money will be invested. The role you have is providing information about general investments you would like to use, but generally, the custodian holding your account will have financial control until you start withdrawing from it.

With a self-directed IRA, you control how your money is invested. You make all the decisions, from investment type to specific details. You can use these accounts to invest in alternative assets, like real estate, that you typically can’t access with an IRA at a more traditional custodian. You’ll also be responsible for making the financial decisions yourself. Read further for information on other types of IRA accounts.

 

Why Should You Invest with a Self-Directed IRA?

For many people, knowing they have much more control over how their money is spent is the main reason to open a Self-Directed IRA. For those who already have some investment experience with alternative assets, Self-Directed IRAs are a great vehicle to save for the future by investing into assets they already know and understand. This flexibility can potentially lead to excellent returns when used with the appropriate financial investment strategy.

Whether it’s a Traditional IRA or a Roth IRA, a Self-Directed IRA also gives you all the tax advantages of an IRA with the freedom and flexibility of a wider array of investment instruments. The opportunity to take control of your financial future with greater asset diversification is one reason to invest in a self-directed IRA.

 

How Do You Start Investing with a Self-Directed IRA?

First, identify a custodian that administers Self-Directed accounts. Be sure to consider their expertise, funding time, and understanding of the market you are in. When you find a custodian you are comfortable with, you will want to open the account of your choice. Some custodians may require you to contribute funds at the time you establish the account, but others will allow you to open the IRA with no account minimum requirements.

Once your account is open, you can now choose the type of investment that you want to hold. It’s important to remember that there are certain investment rules you must follow with a self-directed IRA. You should not have any association with the business that you choose or have any control over it. Also, your spouse, ascendants, descendants, their spouses, or any fiduciary that advises you on IRA should not have any links with your business venture.

After you have found the perfect investment, you can then direct your custodian to purchase it, specifying the buying price, percentage of interest (for an LLC or partnership), the number of market shares you want to buy (for a corporation), or any other specifics for the investment. Now that the custodian has purchased the investment, you hold that asset in your Self-Directed IRA. And that’s it!

Self-direction can be a great option for those looking to take more control of their financial future, and once you understand the process, it can be easy and enjoyable. If you are interested in learning more about self-directed IRAs or would like to get started, schedule a free consultation with an IRA specialist today!

 

Self-Directed IRA Roadmap

How to Invest in the Houston Real Estate Market

Estimated reading time: 4 minutes

Have you ever imagined using your retirement funds to buy real estate? It’s certainly not something you can do with a common IRA at a traditional custodian that offers only stocks, bonds, and mutual funds as investments. However, when you have an IRA account at a Self-Directed IRA custodian these investment options are available to you. Self-Directed IRAs are putting the power back into the hands of real estate investors across Houston. The thought of using your retirement savings to purchase real estate and other private, non-traditional assets might seem outrageous, but with the right education and the right market, you could be to a tax-free retirement.

A Self-Directed IRA is a type of retirement account that provides real estate investors the ability to hold assets they know and understand, like real estate. These accounts come in many shapes and sizes, from Traditional and Roth IRAs, to SEP and SIMPLE IRAs. No matter which self-directed account you use, the benefits remain the same:  investing with Self-Directed IRAs to earn tax advantages for retirement adds freedom and flexibility for a wider array of investment options.

As the Houston real estate market continues to heat up, more and more local investors are looking for ways to ensure successful deals. Self-Directed IRAs can offer flexibility, accessibility, and added tax benefits for investors wanting to take advantage of a hot real estate market. A Self-Directed IRA gives you the option to invest in all types of real estate, including single-family homes, multifamily and commercial properties, mobile homes, land, oil and gas, small companies, real estate notes, and so much more.

 Understanding the Houston Real Estate Market

If you’ve been keeping up with the activity in the Houston market, it’s no shock to hear that it’s the hottest it’s been in a long time. The demand for real estate in Houston is extremely high, and it’s making it difficult for investors to find properties. According to one investor, it’s becoming difficult to simply even go see an available property.

“You have to make an offer first,” says Derreck Long, an expert Self-Directed IRA investor in the Houston area.  “Once the offer is accepted, then you can go look at the property. Properties are just going so quickly, and it has to be a good offer since it’s so competitive. There might be a property listed at $300,000, but if I offer $300,000, it’s not going to be accepted, because they know other people are going to offer more. They already are. Everyone’s buying anything and everything.”

 

The Secret to Investing with a Self-Directed IRA in Houston 

In a market so competitive, understanding how to use a Self-Directed IRA can be a great tool and could help you get a deal you typically wouldn’t be able to attain. Self-Directed IRAs are designed to hold funds for retirement, and they generally hold a sizable lump sum of money readily available.  In real estate, cash is king! Having cash easily accessible in a Self-Directed IRA could help you lock in a deal faster than a regular investor who may not have those funds laying around.  For most investors, there is usually more cash sitting in their IRA than a normal checking account. With the market so hot, some sellers in the area won’t even entertain anything other than a cash offer.

Investing this way also means you don’t have an investment that is debt-leveraged. Based on expected trends, if you have the ability to pick up a property right now and sit on it just for a year or two, chances are that it’s going to increase in value.

How to Invest with a Self-Directed IRA

The process of buying a real estate asset in your Self-Directed IRA is quite simple, but it’s important you and your custodian fully understand the process so that you can move quickly without the risk of losing a good deal. The first step is locating an investment of your choosing. Once you have selected the property you would like to purchase within your IRA and have completed the due diligence, you can complete your investment documents and work with your custodian to fund your deal.

This is where it becomes extremely important to work with a local custodian that is familiar and knowledgeable with the Houston real estate investing market. Processing times are a crucial consideration when selecting a Self-Directed IRA custodian. In a hot market where properties are getting snatched up quickly, finding a custodian that can work fast and efficiently will increase your chances of having a successful deal.

Self-direction can be a great option for those looking to have greater control of their financial future and take advantage of a hot market. If you are interested in learning more about Self-Directed IRAs or would like to get more information about self-directing in the Houston market, Quest Trust Company is the leader in high-quality investing education. For everything you need to start investing for retirement, Quest can help you get started.

Top Reasons to Build Your Retirement Savings in 2022

Estimated reading time: 3 minutes

As we enter into the first few days of the new year, people young and old are eagerly setting their goals for 2022. Common activities like going to the gym and saving money are resolutions on most peoples’ minds… but what about investing more in a retirement account?

Setting yourself up for the future is one of the best practices you can take, and as we say hello to 2022, there’s no better time to start saving for retirement with a Self-Directed IRA. Adding Self-Directed IRA investments to your retirement savings portfolio can help you build wealth so you can retire comfortably! Here are some of the top reasons Americans should add building a retirement savings plan to their 2022 goals:

 

 1. Retire on Your Own Terms

When you invest with a Self-Directed IRA, you are taking back the control over your retirement account. With the ability to invest beyond publicly traded investments into non-traditional assets like real estate, notes, private companies, oil and gas, multifamily property and much more, you can easily grow your retirement account by directing it into investments you know and understand. You can decide the terms of your investments and can make all the decisions about where your money goes. Being able to distribute funds into almost any alternative investments that you’re familiar with will give you more flexibility and peace of mind.

 2. Save in a Tax-Deferred Retirement Account

It’s no secret that there are multiple different saving and investing vehicles out there to choose from, but you should really focus on savings accounts that were created with retirement in mind. Although saving in any account is good practice, investing in a tax-deferred or tax-free account can provide added benefits that other savings accounts cannot. Saving in a tax-deferred account reduces the amount of taxes you owe on the income for each year you invest in it, allows you to defer (and sometimes even avoid) the taxes you owe on the earnings that build on your investments, and it creates additional earnings on top of earnings. This produces a compounding effect – something unavailable in a regular savings account. Learn more about the power of compounding interest from Quest Founder, Quincy Long.

 

3. Don’t rely on social security

Social Security can be a great source of money for when you retire, but it shouldn’t be the only bucket of money you are relying on. Financial advisors and Investopedia say that those looking to retire will need about “70% of their work income” in order to be comfortable in retirement. With Social Security only making up about 40% of the income needed, you will want to have other buckets of money. Investing with a Self-Directed IRA could be the answer! Utilizing another retirement vehicle can exponentially increase your retirement funds.

 

By spending a little bit of time at the beginning of this year, you could be setting yourself up for major success down the road. All it takes is a little bit of planning! Starting a self-directed IRA in 2022 and using it to invest could be the answer you’ve been looking for. If you’d like to learn more about why the time to start saving for the future is now, we would love to share how to invest for retirement. For further information and the benefits of Self-Directed IRA investing,  schedule a free call today!

End of Year IRA and Retirement Planning

SDIRA and Retirement Planning
Estimated reading time: 3 minutes

The year 2021 brought its ups and it’s downs, but no matter how the past year has left you feeling, it’s time to prepare for the upcoming year ahead. Part of getting ready for the New Year, though, means tying up all the ends from the past year… especially with your Self-Directed IRA and other retirement accounts. We’ve listed some of the most common end of year financial questions from SDIRA holders.

 

What is a Fair Market Valuation and do I need to submit one?

Fair market valuations (FMVs) are values required by the IRS for the worth of assets in your retirement account.  FMVs are required to be reported to the IRS by the Custodians each year, making it very important to submit this information. Custodians will require this end-of-year estimate for each individual asset in the IRA, so if you hold an investment in your IRA, you will need to complete a Fair Market Valuation. FMVs typically require supporting documentation, as well. Read on our website for further information about FMVs.

 

Are RMD’s due for 2021?

Yes, for 2021, you must take your RMD if you are age 72 by December 31, 2021. The RMD suspension was only for RMDs due in or for 2020. If you have additional questions regarding RMDs, please contact your financial advisor or visit the IRS website.

 

How does the SECURE Affect RMDs?

The SECURE Act did bring some changes to RMD rules. If you reach 70 ½ in 2020 you must take your first RMD by April 1st of the year after you reach 72. If you fail to take your required minimum distribution, you will get hit with a 50% excise tax on any RMD that you do not remove.

 

Will I owe tax if I took a COVID-related distribution? Can I repay my coronavirus-related distribution to my retirement account?

Starting with the year when the distribution was received, these distributions are included in income in three equal portions over a three-year period. For example, if you received a

$3,000 distribution in 2020, you would report and pay income tax on $1,000 in tax years 2020, 2021 and 2022. You can repay any portion up to the full amount of the distribution if deposited into a retirement plan or IRA within three years of the date the distribution was received. Repaid distributions are not subject to federal income tax. Taxpayers can also receive a refund of tax that is already paid, meaning if you repay the full amount of your coronavirus-related distribution in 2022, you won’t have to include any of the distribution in your income for 2022. Simply file amended federal income tax returns for 2020 and 2021, and this allows you to claim a refund of the tax paid on the amounts you included as taxable income for those years.

 

What happens if I made an excess IRA contribution this year?

You may withdraw excess contributions from your account by the due date of your tax return (including extensions) if you exceed the 2021 IRA contribution limit. If the excess contribution is left in the account, you will have to pay a 6% tax each year excess amount is left in your account.

 

Planning for the end of the year doesn’t have to be stressful, and our Quest representatives are here to help you move into 2022. If you have more questions about your SDIRA and what the close of 2021 means for your retirement accounts, our specialists are here to help. Schedule a free call today!

Quest Trust Ranks 1st for Best Self-Directed IRA Custodian for 2021

Estimated reading time: 2 minutes

Our world-famous customer service has set us apart once again as Quest proudly takes the title for Best Self-Directed IRA Company of 2021!

There are always a lot of great self-directed IRA companies in the running for this highly sought-after title and Quest is grateful to be presented with this award. 

Each year, independent surveys are sent out to investors who have experience with various custodians and other companies in the industry. Overall reputation, length of time in business, client testimonials, and professional peer opinions are all factors taken into consideration when casting votes.

Quest may be one of the nation’s fastest growing self-directed IRA custodians, but we’ve never forgotten our most important goal – to always provide the highest level of customer service, alternative investing education and self-directed IRA services. 

Quest Trust Company was able to receive this 1st place ranking thanks to many factors, the two biggest being our exceptional level of education and care for our clients. From our weekly webinars and updated education center to the expert level of understanding you receive from calling in and speaking to a trained representative, Quest always provides exceptional knowledge and training. When it comes to our services, like exceptionally fast funding times and modern online investing systems, Quest beats the competition. 

Our clients have shared that Quest is a “fabulous company that provides a ton of training, seminars, and special events to network and learn… All the employees are well trained and always helpful to answer any questions you might have. They are very prompt at handling all your investment transactions.”

We know a lot of consideration is taken before a winner is chosen, and it is an honor to know that the hard work that came from the Quest team in 2021 has been noticed within the investing community. 

If you’d like to experience the Quest difference for yourself or get more information about Quest, see what sets us apart by giving us a call at 855-FUN-IRAS. At Quest, consultations are always free and live representatives are always available to share options about transferring to a self-directed IRA!

To learn more about how to get started investing with a self-directed IRA, schedule a 1-on-1 consultation with an IRA Specialist by clicking HERE.

Sarah Bio

Women in Business – How to Be Successful

Estimated reading time: 9 minutes

Have you ever wondered if your gender could affect how comfortable you are in retirement? This may not be a question on everyone’s mind, but it’s something women are facing every day. Recent studies have shown that the challenges women face during their working years can affect their lifetime earnings and retirement income. In order to feel comfortable and prepared for retirement, being able to overcome those obstacles is key. Today, I will interview Tracy Rewey, a successful note expert who will share her tips for creating success as a woman I the industry. 

Sarah: Thanks for joining me today, Tracy. This article is going to be about successful women in business. I’ve been doing a lot of research lately that shows women don’t feel like they’re prepared for retirement. They feel lost. I want to talk to you – a successful women – how you were able to build up your nest egg, and tips for how others can create success, whether it be now or for retirement. 

Tracy: I love it. I think that everybody struggles with it. This fits right in with what we do.

Sarah: Can you tell me a little bit about who you are and how you got started?

Tracy:  Absolutely. I was introduced to the world of seller financing in the 80s and worked with real estate attorneys, title companies, and servicers in a very small town. There was quite a bit of seller financing there, so I learned about seller financing, notes, and people investing in notes. Then, I went to work for a company where that was all they did. I worked there for 10 years, then I started my own company called Diversified Investment Services with my husband. We founded noteinvestor.com and now I get to work for myself. You have so much more freedom of time and location, and you get to reap the rewards of all your efforts. That’s how I got introduced to the whole business.

Sarah: That’s cool. When you find something you’re passionate about, you stick with it. In the midst of all of this, where did you learn about self-directed IRAs?

Tracy: While I was working for the investment company, we had a lot of people that would refer us deals. Some of them would also buy the notes, keeping some of it in the backend in their retirement account. That was my first exposure. Seeing other people do it and going to conventions showed me, but I didn’t get to do my first deal until I left and converted my 401k to a self-directed IRA. 


Sarah: When you were first getting started, did you have any business partners besides your husband or outside help besides learning from the company that you had been with?

Tracy: I was very fortunate when I worked for 10 years there. I learned from some of the best. Marcus was their main guy in charge, and he was always like a mentor to me. He said, “Look, I have two daughters. They are in the business finance world. I want to teach you and to treat you the way I would want somebody to treat my two daughters.” I think that was unusual back then.

Sarah: Wow. What a kind role model. It’s good that you had someone in your life that to help with those steppingstones. What challenges have you experienced throughout your time in this industry as a woman in business?

Tracy: I think there are benefits and I think there are challenges. Some of the challenges for me is not sounding assertive enough. I don’t have that deep voice to sound more assertive. I’ve found that saying less when I’m in certain situations usually helps instead of saying too much. I tend to be a talker. I also think being underestimated can be a challenge, but that can also work to your benefit.

Sarah: And what have some of those benefits been?

Tracy: I struggle with saying it’s a male or female trait, maybe it’s a personality trait, but I do believe that women tend to be natural listeners, natural fixers, and natural empathizers. In the business I’m in, people are often selling their notes, because they’re trying to solve a problem and they need the funds for something else. Maybe they had a health concern, the note’s not paying, they have to send their kid to college, or they’ve lost a job. It’s important to be a good listener and a good empathizer. I don’t use that as a strategy. It’s just something I do naturally, and I think that has been a benefit. I am also an analyzer and I’m very detail oriented. Sometimes women make up for not being sure by trying to be over sure, but in our business, that is also a benefit. I don’t mind going through the documents, taking the time, and making sure that I don’t take everything at face value. 

Sarah: I love that take on it. You don’t often hear those points you made. Has being a female ever stopped you from a successful investment? Have you ever experienced discrimination?

Tracy: Honestly, if it has, it might only be because I was still learning to trust myself. That’s one of the things I always say: wealth doesn’t know you’re a woman, right? This financial calculator doesn’t know I’m a woman, right? The title policy doesn’t know that when I look at a payment history. It doesn’t know the interest rates. I think it’s a good industry on the finance side. Now, I definitely experienced things that were expected, like really proving yourself before someone would move you up. I always joked that I had to do twice the work and make half the mistakes, but I eventually became a vice president at that company. Another female and I were the first vice presidents the company had. 

Sarah: Oh wow! What a big accomplishment!

Tracy: Thank you! I think you have to grow thick skin. I don’t mean that to discount what anybody has gone through, because I know there are people who’ve had serious discrimination and it’s been very wrong, but I’ve been fortunate. 

Sarah:  Well, that’s good! That’s good that you haven’t! That’s what we like to hear. I’m sure that there were probably some tough times that you had to go through still. How did you persevere through those?

Tracy: When I started out, my first job besides babysitting was in high school, I worked for an attorney’s office. I used to do all the routes, picking up and dropping off papers. There was this one real estate office with this one gentleman and I was young. I’d go to pick up papers and he actually swatted me on the backside as I was walking out the door one time. I was in tears. There was a lady who I worked with, the mother hen of the office, and she was not having any of that. Shortly after, that route was no longer on my route, and they had to bring their own documents to our office. I felt validated, which was nice. 

Sarah:  Wow. I’m glad that they took you off that route. That’s good.

Tracy: I know. I commend them. They didn’t pretend it didn’t happen. I’ve been surrounded by good people in my life that were supportive. I had a very strong mother too, so she learned to make me stand up for myself.

Sarah: Always so much to learn from our mothers! Now, you are quite successful. You have your own business, you’re hosting expos, and you’ve got a solid track record behind you. What would you say is your secret to success?

Tracy: I would say perseverance, being a good listener, being a good problem solver, and not trying to squeeze every last dollar. I know it’s cliche, but I really believe that there are ways to make everybody come out of a situation feeling good about it. I think being able to collaborate with other people is key. I’m so very fortunate I’m at a place in my life where I can support and help other people that are learning the business. I get a lot of enjoyment out of that.

Sarah: That’s great! So, what about self-directed IRA investing? Have you used your expertise to invest with a self-directed IRA? 

Tracy: I’ve done some partials in my IRA. Those have turned out well. I try not to mix income. If I’m putting a deal in my IRA, I keep those separate. If I buy all of it in the IRA, I sell all of it through the IRA and hold it for a certain amount of time.

Sarah: That’s smart to keep those two buckets separate.

Tracy: I’m probably more careful than most. I never want to co-mingle funds in any way.

Sarah: Very smart. It sounds like you’ve been able to balance that quite well. How do you handle your work/life balance? 

Tracy: The real answer is that I still struggle with that. I wish I had words of wisdom. I think we tend to put ourselves last because, and then we think we’re doing it because we love and support all the people around us. Really, what happens is that we end up not being the best form of ourselves when we run ourselves thin. Then, nobody really benefits. I have learned over the years that you have to take time for yourself. You have to have balance and understand that everything will not always get done. We have to make time for ourselves and to nurture ourselves, but sometimes we forget to do that. It’s good when you have somebody around you that you can trust. But I’m still working on that. 

Sarah: I think that’s true. I think a lot of people are continuously working towards finding the right balance. To round it here with some of my final questions, what would you like to achieve next? What are your goals? What’s on the horizon for you?

Tracy: I have a goal to help women become more comfortable and secure in investing, and I think there’s some beautiful trends happening where I’m seeing more of that. I’ve been trying to be part of that movement. Last year, we started the Wise Women Investors Group and the Wise Women Expo. It’s about building that community and supporting women to be confident, to invest with confidence, and to gain freedom so they can live more balanced and free lives. 

Sarah: That really is amazing! And I know there are other educational resources you’ve done. Care to mention that?

Tracy: I’ve written a 400-page manual, but it’s not a digestible book. It’s more of a “how-to”, so that’s on my horizon as well.

Sarah: That’s exciting. You’ve definitely done a lot in your career. My last question for is this: for the women looking to get more involved and grow their retirement accounts, what are your tips for growing a self-directed IRA?

Tracy: We actually did a wonderful webinar with Quest on that. It was about my top 10 tips for buy notes in an IRA. I would definitely refer people to that class. If I had to boil it down to a couple of things, I first would say to just do something and to start wherever you are. We are constantly underestimating ourselves or being frustrated by something we didn’t do. I encourage everyone, no matter where you are at in your time, to let that go and to start. If you don’t have an IRA account, then open one. If you have one and you haven’t fully contributed to it, then figure out how to do that. If you’ve done that and you still haven’t fully invested your money and it’s sitting there uninvested on the sidelines, then do something about that. I’ve certainly been guilty of all those things along the way, so I’m not preaching or judging. I’m just saying, take some action. Learn, invest, and make some mistakes because you learn from those. I have. Lastly, solving problems. They don’t go away by ignoring them.

Sarah: That’s great advice. Everything you mentioned is so true. Tracy, thank you again. I really appreciate the time you’ve set aside to participate in this article. Hearing you share how you’ve been successful as a woman in the industry was really inspiring. You’re a wealth of knowledge and have shared some great advice. 

If you would like more information about the Top 10 Tips for Buy Notes in an IRA, you can rewatch the class on our Youtube page! To learn more about how to get started investing with a self-directed IRA, schedule a 1-on-1 consultation with an IRA Specialist by clicking HERE.

Growing Your Retirement by Investing in What You Know Best: Getting Back to the Basics

Estimated reading time: 3 minutes

Building wealth and saving enough for retirement can get overwhelming, but it doesn’t have to be. Most people think that they can only invest in publicly traded investments like stock, bonds, mutual funds, and CDs… but that isn’t true at all. With self-directed IRAs, you can diversify your investment portfolio into private assets like real estate, notes, land, oil and gas, and other private entities. The best part? It’s all on your terms. Self-directed IRAs truly allow people to take back control of their retirement savings and invest in assets that make sense to them. 

What is a Self-Directed IRA?

Self-directed IRA custodians make investing fun while putting the control back in your hands. A self-directed IRA is like any other IRA account; the term “self-directed” is just used to describe the type of account it is. The difference between a regular traditional IRA and a truly “self-directed” IRA is the types of assets they hold. With a self-directed IRA, you have the ability to choose from the broadest possible spectrum of investments, including those not traded on a stock exchange. You get to make all the decisions about your financial future. Most people find that they make more money and feel more confident when they are able to invest into things they know and understand. 

What Can an IRA Invest Into?

A self-directed IRA can be used to purchase almost any private asset. Common investments include single family real estate, rehab properties, commercial and multifamily real estate, private loans, performing and non-performing notes, oil and gas, land, startup companies, LLCs, and other private businesses. The list goes on! The rules say that as long as you do not invest into collectibles, like art or cars, and life insurance you are safe. 

What types of accounts can be self-directed?

Every custodian will offer different accounts. At Quest, we offer seven different types of retirement accounts that can be self-directed:

  • Traditional IRA – With the Traditional IRA, your earnings grow tax-deferred. Only pay taxes on your gains when you make withdrawals in retirement.
  • Roth IRA – The Roth IRA is a special retirement account where you have the ability to grow your profits completely tax-free.
  • SEP IRA – This self-directed tax-deferred account can be great for self-employed individuals, allowing a tax deduction for contributions made to a SEP IRA.
  • Simple IRA – A SIMPLE IRA is an employer-sponsored retirement plan designed specifically for small businesses, giving employees and employers a simple way to contribute and grow this account.
  • HSA – Get the best of both worlds with an HSA, with the ability to get tax-deductions on contributions and tax-free distributions for qualified medical expenses.
  • ESA – Education isn’t cheap, but with a Coverdell ESA you can earn tax-free distributions on countless qualified educational expenses as you self-directed this account.
  • Solo 401k – With the extra benefits that come with this account, like checkbook control and more freedoms, many people are eager to learn how to get started – just make sure you qualify.

Self-direction can be a great option for those looking to take more control of their financial future. If you are interested in learning more about self-directed IRAs or would like to get started, schedule a free consultation with an IRA specialist today by clicking here!

Quest CEO is Honored with NoteSchool’s Lifetime Achievement Award

Estimated reading time: 2 minutes

H. Quincy Long, Quest Trust Company Founder and CEO, will be honored tomorrow at NoteSchool’s Note Expo convention for his outstanding and notable contributions to the industry. Note Expo 2021, an educational event taking place tomorrow November 5th-6th, will award our very own Quincy Long with the Lifetime Achievement Award! 

Quincy has a decorated background in the industry. He received his Doctor of Jurisprudence from the University of Houston, and then went on to create Quest Trust Company, which traces its roots back to 2003. Now, Quest has over 35 Certified IRA Service Professionals with American Bankers Association (CISPs), with a large portion of the company mission focusing on education for clients and employees alike. 

“In my position as CEO and founder of Quest Trust Company, I have the privilege of showing people how to take control of their IRAs and other retirement assets and invest in what they know best – real estate,” Long says. “Whether the investment is the direct ownership of real estate, loans secured by real estate, or LLCs, limited partnerships, trusts, and other entities that invest in real estate, it can all be purchased within a self-directed IRA.”

With numerous achievements, like the recent 2021 Think Realty Honors Linda’s Legacy: Industry Impact Award he was just given, it comes as no surprise that he is receiving his honor. In his career, Long sat on the board of directors of the Realty Investment Club of Houston (RICH), and he is the author of numerous articles on SDIRAs and other real estate related topics. His expert education has made him an influential figure in the SDIRA industry, often recognized as a pioneer and leader.

“I am passionate about what I do because I believe in freedom of choice, but I also believe that with great freedom comes great responsibility,” he says. “There are rules which must be followed in order to succeed with a self-directed IRA, so I am also passionate about providing high quality education to our clients about the rules and the various investment techniques.”

It’s no secret that Quincy has a huge impact on the entire Self-Directed IRA industry – just listen to what Eddie Speed, Founder of NoteSchool has to say in this video here: https://youtu.be/8-mn-yDqq2I

Receiving this award is a great compliment, and we are honored to share the news with you! To experience what it’s like to self-directed your IRA at a company with Quincy’s values and knowledge, schedule a call to speak with an IRA Specialist HERE about building your wealth at Quest

Take Action! Proposed Changes to the Laws Governing IRAs that Could Affect You

Estimated reading time: 9 minutes

Your financial security is our priority and the relationship you have with Quest Trust Company is very important to us. That’s why we want to make you aware that the United States House of Representatives has proposed changes to the laws governing individual retirement accounts (IRAs) as part of its $3.5 trillion reconciliation package. These changes, if enacted into law, would have a direct negative impact on you and your ability to save for a secure retirement through an individual retirement account, like the one you have today at Quest Trust Company. 

This doesn’t just affect a few people; this affects everyone! Small business owners, start-ups, housing providers, local businesses, and the average investor like yourself would all be affected if this bill passes. Your retirement money is just that – yours. You should be able to continue putting your money into investments you understand and know and trust, confident that your money is helping not only you but your community, as well. Continue reading below to see how this could affect you.

How Would The Proposed Legislation Affect You?

The proposed legislation would significantly affect Self-Directed IRAs. It would prohibit IRAs from holding privately-placed equity and debt securities and other investments that require IRA owners to meet minimum financial, educational or licensing requirements. For example, the legislation would prohibit IRAs from holding unregistered investments that are offered to accredited investors, like equity or debt investments in small businesses or investments in private funds. You may very well hold investments in your IRA today that would be prohibited by the proposed legislation.

The bill would also prohibit IRA owners from investing in (1) non-publicly traded entities in which the IRA owner and related entities (including the IRA itself) own more than a 10% interest or (2) any entity in which the IRA owner is an officer or director, regardless of ownership percentage. By way of example, single-member limited liability companies or any investment in an entity in which an individual is a director or officer could no longer be held in an IRA. IRAs holding any of the above investments would lose all of the tax advantages previously available to the IRA.

If the proposed legislation is enacted, you will no longer be able to purchase any of the above investment types in your IRA. Further, you will be required to dispose of any such investments that you currently hold in your IRA by no later than December 31, 2023, which could result in significant and previously unforeseen financial and tax consequences, including taxes and penalties associated with any assets that could not be sold or liquidated and must be distributed in-kind from the IRA.

The text below is a more detailed summary of the changes written by CEO and Founder of Quest Trust Company. The following paragraphs outline the seriousness of the proposed changes.   

Summary of Changes Proposed by House Reconciliation Bill

Provisions Only Affecting High-Income Taxpayers with Large Account Balances:

  1. Taxpayers fall into this category if they meet two tests – they must have BOTH aggregate vested balances in the combined total of all retirement accounts (including 401(k)s, 403(b)s, etc.) of over $10,000,000 and have adjusted taxable income of $400,000 for a single taxpayer, $425,000 for a head of household taxpayer, or $450,000 for a married taxpayer filing a joint return (all indexed for inflation).
  1. No more contributions to a traditional or Roth IRA are permitted (Section 138301).
  1. Employer-sponsored defined contribution plans (such as 401(k)s, 403(b)s, etc.) would have to report to the IRS and to the plan participant on aggregate account balances in excess of $2,500,000 (Section 138301).
  1. All qualified retirement plans and eligible deferred compensation plans are counted as one plan for purposes of determining required minimum distributions (Section 138302).
  1. If the combined Roth IRAs, traditional IRAs and employer defined contribution plans exceed $10,000,000 at the end of a taxable year, the required minimum distributions are increased for the following year to 100% of the amount necessary to bring all qualified retirement plans and eligible deferred compensation plans down to $20,000,000, and 50% of the remaining balance over $10,000,000 (indexed for inflation). The RMDs must be allocated first to Roth IRAs and then to designated Roth accounts under the 100% distribution rule, but taxpayers may choose how to satisfy the 50% distribution rule once the 100% distribution rule is satisfied (Section 138302).
  1. These provisions apply to tax years beginning after December 31, 2021.

Provisions Affecting High-Income Taxpayers (Without Regard to Balances):

No more Roth Conversions or Rollovers for High-Income Taxpayers

  1. If a taxpayer is a High-Income Taxpayer (defined as a taxpayer who has adjusted taxable income of $400,000 for a single taxpayer, $425,000 for a head of household taxpayer, or $450,000 for a married taxpayer filing a joint return (all indexed for inflation)), the taxpayer may only do a qualified rollover if it is made from another Roth IRA or from a designated Roth account (Section 138311).
  1. If a taxpayer is a High-Income Taxpayer, Roth conversions of both IRAs and employer-sponsored plans are prohibited (Section 138311).
  1. These provisions apply to distributions, transfers, and contributions made in taxable years beginning after December 31, 2031 (this date may be a typographical error which will be corrected) (Section 138311).


Provisions Affecting All Taxpayers Without Regard to Income or Balances:

Prohibition of Investments Requiring Certifications

  1. A restriction is added to the qualifications for an account to be an IRA by adding an additional paragraph (7) to Section 408(a), which states that no part of the trust funds will be invested in any security if the issuer of such security requires the individual on whose behalf the trust is maintained to make a representation to the issuer that such individual (A) has a specified minimum amount of income or assets (e.g. an accredited investor), (B) has completed a specified minimum level of education, or (C) holds a specific license or credential (Section 138312).
  1. If, during any taxable year of the individual for whose benefit any individual retirement account is maintained, the investment of any part of the funds of such individual retirement account does not comply with Section 408(a)(7), such account ceases to be an individual retirement account as of the first day of such taxable year (Section 138312). In other words, if an IRA holds one of these prohibited investments the entire IRA is disqualified.
  1. These requirements shall apply to tax years beginning after December 31, 2021. However, if an individual retirement account holds any such prohibited investment as of the date of enactment of the act, the amendments will apply to such prohibited investments for taxable years beginning after December 31, 2023. In other words, an IRA holding a prohibited investment must dispose of or distribute the asset by no later than December 31, 2023 or the IRA will cease to qualify as an IRA (Section 138312).

No More “Back Door” Roth Conversions

  1. To slam the door on “back-door” Roth IRA strategies, the bill prohibits all after-tax contributions in both IRAs and employer-sponsored plans from being converted to Roth accounts, regardless of income level. This section applies to distributions, transfers, and contributions made in taxable years beginning after December 31, 2021 (Section 138311).

Extension of Statute of Limitations With Respect to IRA Non-Compliance

  1. The bill expands the statute of limitations for IRA non-compliance from 3 years to 6 years for substantial errors in valuation-related reporting (whether willful or otherwise) and prohibited transactions Section (138313).

Prohibition of Investments in Entities in Which the IRA Owner Has a Substantial Interest

  1. The bill prohibits IRAs from investing in entities not tradable on an established securities market if the entity is owned 10% or more by the IRA owner, either directly or indirectly (down from 50%). Indirect ownership by the IRA owner includes the ownership interests of certain family members of the IRA owner. The bottom line is that if the IRA owner and certain family members of the IRA owner collectively own 10% or more of (1) the combined voting power of all classes of stock entitle to vote or the total value of shares of all classes of stock of such corporation, 2) the capital interest or profits interest of such partnership or enterprise, or 3) the beneficial interest of such trust or estate, then such investment is prohibited and may not be held by the IRA (Section 138314).
  1. The bill also prohibits IRAs from holding investments in which the IRA owner is an officer or director (or an individual having powers or responsibilities similar to officers or directors) of such corporation, partnership, or other unincorporated enterprise. In other words, a “checkbook control IRA-owned entity” is prohibited (Section 138314).
  1. An IRA which holds one of these prohibited investments will cease to be an IRA as of January 1 of the year in which the IRA acquires the asset. However, if an IRA holds such an investment on the date of enactment of the Act, the rules will apply to such investments for taxable years beginning after December 31, 2023 (Section 138314). In other words, the IRA may continue to hold such prohibited investments until December 31, 2023, at which point the asset must be disposed of or distributed.

Clarification That IRA Owners Are Disqualified Persons For Purposes of The Prohibited Transactions Rules

  1. The bill clarifies that the IRA owner is a disqualified person for purposes of the prohibited transactions rules by adding such an individual to the definition of a disqualified person in Section 4975(e)(2) of the Internal Revenue Code (Section 138315).

HERE ARE VIDEO DISCUSSIONS FROM INDUSTRY EXPERTS REGARDING PROPOSED TAX LAWS:

  • Discussion of the bill’s effects with Troy Eckard – https://www.youtube.com/watch?v=QHC4AELKx6o&t=1s
  • Discussion with Tom Berry Regarding Proposed Tax Law Changes – https://www.youtube.com/watch?v=h0SXRpamg5g
  • Discussion with John Hyre Regarding Proposed Tax Law Changes – https://www.youtube.com/watch?v=MucJMxNtay0
  • Discussion with David Phelps Regarding Proposed Tax Law Changes – https://www.loom.com/share/b9eee7f5022d4ba2adc16a39a0a8d504
  • We’re advocating for you. We want you to know that we are working closely with our third-party advisors in Washington D.C., along with other major industry participants with the goal of having these provisions removed from the reconciliation package. Know that, as always – we will continue to be a strong advocate for investor choice. We also want you to feel secure in knowing that our company is well-positioned to continue to succeed, no matter the outcome of the proposed legislation.

    Not sure how to contact your U.S. Congressional Representative?

    Go to: https://www.house.gov/representatives/find-your-representative

    Not sure how to contact your U.S. Senators?

    Go to: https://www.senate.gov/senators/senators-contact.htm

    Additional Resources:

    Share your Questions and Concerns with an IRA Specialist – https://calendly.com/iraspecialist/newsletter-complimentary-consultation-with-an-ira-specialist?month=2021-10

    Quest CEO wins Think Realty Honors Industry Impact Award

    Estimated reading time: 2 minutes

    We’re excited to announce that Quincy Long, CEO and Founder of Quest Trust Company, has won the Think Realty Honors Industry Impact Award!

    Each year, Think Realty awards deserving individuals in the real estate industry. From highlighting successful multifamily investors to awarding pioneers in the field, receiving a Think Realty Honors award in any category is a highly sought after title. 

    This year, Quincy was the recipient of the Linda’s Legacy: Industry Impact Award. This Industry Impact Award was named in honor of Linda Liberatore, a champion of the REI industry who pioneered industry innovations and paved the way to success for the many investors she mentored along the way. In tribute to Linda, this award goes to a real estate investor who exemplifies creativity, integrity, and financial success and is changing or shaping the conversation about real estate and real estate investing.

    Quincy Long:

    “I am honored and humbled to be named the 2021 Think Realty Honors Linda’s Legacy: Industry Impact Award winner! 

    “In my position as CEO and founder of Quest Trust Company, I have the privilege of showing people how to take control of their IRAs and other retirement assets and invest in what they know best – real estate. Whether the investment is the direct ownership of real estate, loans secured by real estate, or LLCs, limited partnerships, trusts, and other entities that invest in real estate, it can all be purchased within a self-directed IRA. 

    “I am passionate about what I do because I believe in freedom of choice, and that includes the freedom to invest in alternative investments in an IRA, like real estate. I also believe that with great freedom comes great responsibility. There are rules which must be followed in order to succeed with a self-directed IRA, so I am also passionate about providing high quality education to our clients about the rules and the various investment techniques. Our best client is an educated client. I expect to publish a book soon on my years of experience investing in real estate, mostly through my IRAs.

    “Real estate has been a part of my life since I was knee high to a grasshopper. My family has been involved in real estate since before I was born. I love investing in real estate. It is my past, my present, and my future. Real estate is my passion!”

    With all that he has done for the community, we can’t think of anyone more deserving than Quincy, not only for his role at Quest Trust Company but in the industry as a whole. Stay tuned for the Think Realty Podcast where he will be interviewed and recognized.