Want a quick tip for saving a TON of taxes if you own real estate in a traditional self-directed IRA?   I’ve got just the thing for you now.  I’m Bryan Ellis.  This is Episode #236. ---- Hello, SDI Nation!  Welcome to the podcast of record for savvy self-directed investors like YOU where you are educated, entertained and even INSPIRED to DECLARE INDEPENDENCE from Wall Street… Our goal here is to help you find, understand and PROFIT from the very best alternative assets that money can buy. I’ve got some more tax-saving goodness for you real estate investors who use your Traditional IRA to own real estate. But before we go there… have you checked out SDITalk.com/credit?  That’s where you’re going to learn how to get up to around $250,000 of ZERO-INTEREST capital for your investments or your business.  You know those credit cards that offer a zero percent introductory offer?  Well imagine you could do that… but you could extend the “introductory” period out indefinitely.  That’s what you’ll learn how to do at SDITalk.com/credit.  They’ve set up over $2 million of zero-interest funding for your fellow listeners just since October – you know, during the past 3 months – and more than $4.1 Million in the past year, so this is for real.  Check them out at SDITalk.com/credit. Now onward, my friends… So, let’s just imagine you’re one of the MANY folks who owns real estate in your IRA.  Actually… I’ve got the perfect context for a story to explain this to you. We’re currently doing some research to check out the background of a company who has a unique angle on the turnkey rental property business.  What these people do is work with investors who want to buy a RETIREMENT HOME for themselves in their IRA in a nice location.  So what this company does is basically puts all of that together for the investor, and then monetizes the property for the owner in the form of corporate rentals.  So what you have is high quality tenants who are paying a premium rental rate, and who are likely to take really good care of the property… and then when the time comes for your retirement, you’ve got a home that you can live in, paid for by your IRA! Well, there’s just one little hitch with that. You can’t live in that house until it’s not in your IRA any more.  For it not to be in your IRA any more, it has to be distributed to you, in other words, removed from your IRA. And as soon as that happens, guess what?  You guessed it:  Taxes.  You get to pay income tax rates on the ENTIRE value of the house.  So if it’s worth $200,000 and you’re in the 30% effective tax bracket, you’ll have to come up with $60,000 just to cover the income tax due to you. Ouch.  Hey… that’s the reality… the traditional IRA is just a tool for tax deferral, not a tool for tax elimination. HOWEVER… there is something that can be done quite easily to substantially reduce that tax burden, and I will, of course, share this bit of tax brilliance with you… originally taught to me by the great one, Tim Berry, America’s top self-directed IRA attorney. So we’ve already agreed this house is worth $200,000, right? What is half of that house worth?  $100,000? Well… no, it’s not.  What can you do with ½ ownership of a house?  Maybe you’re entitled to half of the income it generates.  You’re entitled to half of the income if it’s sold.  But do you actually own the house if you o nly own half the house?  No, you don’t.  You can’t independently decide to rent it or to renovate it or the sell it or anything else like that.  You’ve got to get the OK of the other owner, too. So it’s safe to say – and is an accepted truth in tax law that our friends at the IRS would agree with – the value of half (or any proportion) of an asset is LESS than the value of half of the whole thing… and that makes perfect sense. So here’s the play: Instead of distributing the house to yourself from your IRA, distribute HALF of the house to yourself from your IRA, and then the other half at some time in the future… maybe the