Having an IRA Conversion work in your favor

Last week I introduced you to a client that legally fired the IRS. Today I am going to show you another technique one of our clients used to legally avoid taxes on a sale.

Meet Dr. Vicky Spring Love, a seasoned investor, financial guru and IRA real estate investor. Earlier this year Dr. Spring Love purchased a property from us for cash around $30,000 in her IRA. Her goal, rehab the property and sell on a mortgage. She completed approx. $20,000 in work to get the property retail ready. Now the key to this investment was that Dr. Spring Love purchased the property in her traditional IRA. As she lined up a buyer for a $75,000 sales price, she did a conversion on her IRA from traditional to a Roth. Therefore, her $50,000 investment that she was selling in a matter of weeks for $75,000 could be tax free. A savings of approx. $7500.00

She completed her conversion and sold the house for the $25,000 gain. Now, because of the 2010 tax laws, she has til 2012 to pay the taxes on the traditional IRA portfolio value at the time of conversion. Therefore, she can have her money working hard for her for years repeating this model making pure profits!

Way to go Dr. Spring Love