Entrust FrEEdom, L.L.C.

2010 rEtirEmEnt GuidE

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031


2010 rEtirEmEnt GuidE
1. 2. 3. 5. 6. 7. 8. 9. 10. 11. 12. Welcome Letter – Dave Owens Retirement Contribution Limits – Daniel Fisher Rebuilding Nest-Egg – Brian O’Connell Enhanced Life Estate– Edward Hale Mortgage Planning - David A. Wright Diversify Retirement Investments – Dave Owens Saving Money With 1031 – Theresa Knower The Total Control IRA – Brandon Hall Goal Setting is S.M.A.R.T. Business– Heather Christie Save On Your Taxes in 2009 – Randy Wright Roth 2010 Is At Hand – Dave Owens

thE nEw AGE oF rEtirEmEnt PLAnninG
Retirement Planning – Will we have enough? That is the big question. Will you have enough to live a lifestyle that you feel comfortable with? Less than half of working Americans have even begun to save for their retirement, and most believe they will live 18 years after they retire. Retirement is not hard, but saving for retirement is. That is why we have assembled this retirement guide for 2010. The rules for retirement are changing. We have asked experts in various fields of finance to contribute their expertise and compiled the best of these to help you get started or evaluate your current progress and adjust to today’s financial climate. You will read about specific strategies involving setting goals, using real estate in your plan, alternatives to traditional retirement accounts and more. The earlier you begin to plan for retirement, the more choices you have and the greater your chances are for success. Retirement planning is much like planning a vacation. Any trip begins with determining your destination, or goal, and a timetable for taking each step toward that goal. Retirement is one of the most significant life events many of us will ever experience. From both a personal and financial perspective, realizing a comfortable retirement is an incredibly far-reaching process that takes wise planning and continued determination. Even when goals are reached, managing your retirement is an ongoing process that must not be neglected. Please feel free to call Entrust Freedom or any of the other authors that have contributed to this guide. We wish you all the best and hope this guide proves helpful as you pursue your retirement goals.
Dave Owens
Dave Owens, CPA, CES is the managing member of Entrust Freedom, LLC and can be contacted at owens@ entrustfreedom.com or practicing tax accountant for over 20 years.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031


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2010 rEtirEmEnt Contribution Limits AnnounCEd
By Daniel Fisher Now is the time to meet with your CPA, Financial Advisor or Planner to discuss your current IRA contributions and your IRA contributions for the coming year. You need to be sure that you have not contributed in excess of the contribution limits for 2009 and that you are effectively planned for 2010. The majority of IRA contribution limits for 2010 have remained unchanged. However contribution limits for Health Savings Accounts have been slightly increased for 2010. The following tables show the limits for 2009/2010:

Health Savings Ac2009 2010 counts Definition of High Deductible Health Plans Deductibles/Out of Pocket Limits Single Coverage $1,200/$5,950 Minimum/Maximum Family Coverage Minimum/Maximum Health Savings Account Contribution Limits Single Coverage $3,000 $3,050 Family Coverage $5,950 $6,150 Profit Sharing/401(k) Contribution Limits Roth 401(k) Contribution Limits Up to age 50 Catch Up Provision Age 50 2009/2010

Traditional IRA Contribution Limits and Roth IRA Contribution Limits Up to age 50 Catch Up Contributions Provision Age 50+


$5,000 $6,000

$49,000 $54,500

SEP IRA Contribution Limits SEP IRA Contribution Limits SIMPLE IRA Contribution Limits SIMPLE 401(k) Contribution Limits Up to age 50 Catch Up Contributions Provision Age 50+

2009/2010 $49,000* 2009/2010 $11,500* $14,000*

Daniel Fisher New Account Specialist Entrust Freedom 4560 Via Royale #1 Fort Myers, FL33901 239-333-1031 ext. daniel@entrustfreedom.com

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Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



Did the Financial Market Train-Wreck of 2008 Derail Your Retirement Plan?

PErsPECtivE on rEbuiLdinG your rEtirEmEnt nEst-EGG
The financial-market crisis that transpired and eventually waned during the past year has left investors wondering whether they are still “on track” regarding their plans for retirement. The unfortunate truth is that most investors suffered some form of financial setback during the past year, causing the need to adjust their retirement forecasting. Worse yet, many investors who had chosen to manage their retirement assets on their own (instead of through a financial advisory relationship) found themselves in a state of shock after watching a significant portion of their retirement savings disappear over the six month period between October of 2008 and March of 2009. Not surprisingly, investors with shorter investment time horizons (particularly those who are already retired or are nearing retirement) are likely to have been mostaffected by the recent financial market turmoil, while younger investors with longer investment time horizons may not even need to alter their plans for retirement. Based on this premise, the commentary below is intended to provide some direction to the three general age/career groups which comprise the majority of the investment community. Assuming that you already use a financial advisor for your retirement planning, the topics below can be used to initiate a discussion regarding whether you are “on track” to meet your goals with respect to your retirement funding. If you determine that there is a shortfall in your retirement funding, your advisor should be able to provide some guidance on how to “right the ship.” Although it was only a short time ago, we are currently in a much different economic and financial market environment. By working with your financial advisor, you will be able to determine whether you might need to spend less, save more, or put off retirement for several years in order to recoup the value of the portfolio declines experienced between October of 2008 and March of 2009. Avoid the temptation of repositioning your portfolio in an overly-aggressive manner (in an attempt to recoup recent losses) or in an overly-conservative manner (in an attempt to avoid any future losses). Aggressive positioning will likely result in a more volatile portfolio, possibly compounding investment losses; while an overly-conservative approach, for instance moving completely into money market assets, is not likely to keep up with long term inflation. Discuss with your financial advisor, the amount of annual income you might expect to need to withdraw from your investment portfolio during retirement, in order to help determine the most appropriate investment strategy for your particular needs-one that is tailored to providing for your annual income during retirement without taking on undue investment risk.

Investors Between the Ages of 40 -55 (maximum earning potential)
As you make the transition from early-career into a seasoned-professional, you are likely benefit from significant increases in annual income. Consider using additional income to “max out” annual contributions in company sponsored retirement plans (i.e. 401(k)) on a pre-tax basis. Discuss with your financial advisor ways to maximize the long term growth of any other discretionary retirement savings, possibly on a taxadvantaged basis through a Roth IRA or tax-deferred annuity.

Investors Over the Age of 55 (presently retired or nearing retirement)
Although this might be difficult for some investors to stomach, retirement planning assumptions should be adjusted to reflect current investment values rather than investment values at the market highs in 2007.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



By continuing to make regular contributions into your retirement savings during a “down” market period, you have effectively purchased a larger quantity of mutual fund shares for the same cost in dollars. As the stock market resumes its long term upward trajectory, your portfolio will benefit as a larger number of “shares” should magnify the growth of your investment base. Consult with your financial advisor to confirm that your strategic long term asset allocation is consistent with your appetite and capacity to take on investment risk. As your portfolio gains critical mass, you should consider transitioning from the more aggressive positioning of your portfolio to a more balanced investment strategy. Your investment horizon (time until you need to use retirement reserves to meet expenses) is now somewhat shorter than it was than when you were just beginning your career.

fee-based Registered Investment Advisor (advisors who have obtained the Certified Financial Planner™ Professional designation are ideal candidates). Unlike many insurance and broker-dealer relationships which generally compensate an advisor through a productrelated sales commission, fee-based investment advisors are generally compensated for their time on either an asset-based or hourly-based fee structure. Please feel welcome to contact Marquis Wealth Management Group toll-free at 877-454-1117 with any questions or comments regarding the topics outlined within this article. Marquis Wealth Management Group is an independent Registered Investment Advisor based in Ft. Myers, Florida.

Investors Under the Age of 40 (early career)
You have the longest investment horizon of any of the age-groups listed in this article. Begin making investments on a regular basis (this can be done through ongoing payroll deduction). This will provide you with the best advantage of allowing your investments to “work for you” through the power of compounding returns over a period of 30-40 years prior to retirement. Recognize that there are different asset classes (stocks, bonds, etc.) in which you can invest. Mutual funds are considered to be excellent investment vehicles for new investors, from the standpoint that they generally provide instant diversification via a pooled investment fund consisting of a wide array of portfolio holdings, and managed in a specified fashion (i.e. large company U.S. stocks). Generally speaking, stocks are known for having a higher risk profile than bonds or cash, which is also why they offer higher rates of return. As a result, consider investing a significant portion of your retirement reserves in stock mutual funds (or individual stocks). For investors who do not presently have a financial advisor and would appreciate some additional guidance, you may want to consider contacting a Brian P O’Connell, RFC® . Financial Advisor

entruSt Freedom haS Some Great claSSeS planed For 2010.
Check out the complete webinar schedule on the front of our website.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



EnhAnCEd LiFE EstAtE dEEds
By Ned Hale, Esq. An “enhanced life estate deed’ is a great, inexpensive, easy way to avoid probate for a real estate asset while maintaining almost all of the benefits of standard “fee simple” ownership. So often a decedent’s only asset of any real value is their home. But unfortunately, usually that asset must go through sometimes lengthy and always expensive probate proceedings. That is because by the time a decedent dies, it is too late for him or her to “plan” his or her estate. The estate is what it is at death. The heirs are left to do the work and pay the attorneys to probate the estate. Fortunately, the living can still plan their estate. Where one’s main asset is their home, I often recommend that they execute an enhanced life estate deed. What is it? It is a simple warranty deed whereby the owner states in the deed that he or she is the owner of the property for the span of his or her life. During his or her life, the deed states that he or she maintains control of the property. The deed states that he or she can sell the property (at fair market value) or mortgage the property and keep all of the proceeds generated thereby. It also states that he or she can improve the property or even let it fall into disrepair. He or she can do all of this with needing anyone else’s signature. And if the property is homesteaded, there is no effect on the homestead tax exemption and Florida constitutional homestead protection from creditors. And only nominal documentary stamps (all of seventy cents) are due when he or she signs the enhanced life estate deed, since there is no change in the beneficial ownership of the property. The deed goes on to state that upon the owner’s death (and only then), the property automatically goes to whomever is named in the deed. Those named parties are called “remaindermen.” (The remainermen are usually the decedent’s children). The remaindermen would just record the deceased owner’s death certificate in the public records. Then the property is theirs. No probate necessary for that asset. Fully insurable by a title company (or better yet, fully insurable by my law firm) That’s it. No expensive and lengthy probate. The only minor drawback of an enhanced life estate deed is that if the owner does want to sell the property during his or her life, then it must be at fair market value for consideration. In other words, the owner cannot simply disinherit one or more of the remaindermen by signing new deed back to himself or herself, or by signing a new enhanced life estate deed, but leaving out the child that they wish to disinherit. I consider that to be a very minor drawback, because again, the owner can still sell the property at fair market value during his or her life, or mortgage it to the hilt (including by a reverse mortgage), and keep all of the money generated thereby.

Edward W. (Ned) Hale Attorney at Law Hale Law Group, P .A.

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Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



do mortGAGEs PLAy A roLE in rEtirEmEnt PLAnninG?
By David A. Wright Many people’s retirement strategy includes a paidfor home. No mortgage and no mortgage payments help diminish cash outflows for housing and allow each month’s dollar to be allotted for some other task. A solid notion and certainly not one a mortgage lender would take issue with, but there is an alternate strategy that may merit consideration, especially at this moment. I will expound. For the past 11 months our Federal government has attempted to stimulate our nation’s housing market through a concerted policy of support for the mortgage industry. The Federal Reserve allotted $1.4 trillion dollars to purchase mortgage backed securities, and their participation in the market has resulted in 30 year fixed rate loans priced as low as 4.750% and seldom higher than 5.125%. Our intention here is not to discuss the wisdom or mechanics of this policy action but simply to note that, wow, money is cheap. As one considers his or her retirement strategy, a question worth asking is, “Can I profitably put $417,000 leveraged dollars to work for my retirement if the cost of funds is a pre-tax 5.000% or so?” If one answers “yes,” perhaps mortgage loan secured by one’s home becomes part of the conversation regarding one’s retirement planning. Clearly the advice of an experienced financial planner would be invaluable in this discussion because as the conversation unfolds, questions of anticipated returns, risk tolerance, income tax strategies and life style would be of paramount importance. And to be sure, I am not advocating borrowing to fund retirement. However, it seems to me that there may be circumstances when informed planning takes advantage of Washington’s largess for the benefit of a retired borrower. David A. Wright Sanibel Captiva Bank Library Way Sanibel, Florida 33957

real eState in your ira?
Broaden your investment horizons– put some real estate in your IRA. Entrust has a free guide to purchasing real estate in your IRA account. Email Theresa@entrustfreedom.com to get your copy today.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



divErsiFy your rEtirEmEnt invEstmEnts with A rEAL EstAtE irA
By Dave Owens, CPA, CES There are two facts that have converged to make some exciting news for your retirement planning. First, today’s interesting real estate market is making for some great opportunities. Second, with the power of Individual Retirement Accounts (IRAs), all gains inside an IRA account are tax free. These two points come together given the quiet fact that you can own real estate in your IRA. Why Real Estate IRAs? All the proceeds from the sale of a piece of real estate in an IRA can be reinvested in to your next property without giving that large percentage to the government as federal and state taxes. This will allow you to have more principal for you to grow for your retirement. If you are a successful real estate investor this could be your opportunity. Real estate in a IRA can be a powerful investment tool. You can buy real estate as easily as you can mutual funds with the money in your IRA! What a time to buy at historically low prices and reap the benefits tax free in the future. It is important for all investors to note that every deal or piece of property is unique, and it is important that you have adequate information and representation. The author advises all investors to properly consult tax or legal counsel when making an investment. Also, proper planning can go a long way toward a successful transaction. Self-direction means freedom of choice, but it also means the responsibility is yours to be sure the real estate you are investing in is the right fit for you. Over time, real estate investments have opened up a world of appreciation and income to many investors. The purchase of real estate through a self-directed retirement plan is a popular investor choice for this and other reasons. A self-directed IRA or real estate IRA gives you the freedom to invest in many different types of real estate including: • single-family and multi-unit homes • apartment buildings • co-ops • condominiums • improved or unimproved land • Commercial property, • Foreclosures and more Please note: investing in real estate takes hard work. There are also nuances (prohibited transaction and disqualified persons) involved exclusively with real estate IRAs that require you to stay on top of the investment and follow all rules. Please be sure to consult your financial advisor or real estate advisor before starting any transaction.

Dave Owens, Managing Member 4560 Via Royale #1 Fort Myers, FL33901 239-333-1031 ext. 203 owens@entrustfreedom.com

1031 Exchanges are making a comeback!
Learn what you need to know by requesting our free 1031 handbook or by visiting our website: www.entrustfreedom.com

call today to requeSt your Free real eState ira handbook, Entrust Freedom Guide To written by Real Estate IRA’s dave owenS! 239-333-1031
www.Entru stFreedom .co m

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



sAvinG monEy on tAxEs is As EAsy As tEn thirty onE
By Theresa Knower, CES Despite the current market conditions, there is a glimmer of hope as we ease our way into 2010. What is that glimmer of hope, you ask? Well, it has something to do with a long lost friend known as the 1031 exchange. There has been a serious influx of calls from people wanting to know more about this real estate based tax-saving strategy. More importantly, these people not only want the information, they actually want to do one! How is this relevant to the rest of us? First let me walk you through the exchange process, what is involved, and how this might help you. 1031 is a section of the tax code that enables an investor to sell a piece of investment real estate and defer the capitals gains taxes, depreciation recapture taxes and applicable state taxes as long as they purchase another piece of investment real estate of equal or greater value within the allotted time frame. Here is an example. A recent client sold some of his farmland in Ohio for approximately $200,000. He reinvested those funds into several smaller fixer-uppers here in Southwest Florida. He purchased property that was equal to or greater than $200,000.00, and thus paid no taxes. He couldn’t be happier over the fact that he was able to purchase several properties at such great prices. He has since fixed each house up and has tenants in each of them. He was able to sell vacant land and exchange it for income producing property without paying taxes. Now let’s get back to why this is a good sign. If more people are doing exchanges, this means that they actually have some gain in their property that they want to shelter. If there is gain to shelter, this is an indication that things are turning around for the better. Call me an optimist, but I see this as a very good sign. For many of you out there, 1031 exchanges have been pushed to the back of your mind. It’s time to brush up on your 1031 know-how because they are making a comeback. The basic rules still apply. For those of you who need a refresher, here are the five basic rules: Property sold and property purchased must be investment/business use property. You cannot exchange your primary home or second home. In order to defer all of the capital gains (as well as any other applicable taxes), you must purchase a property that is of equal or greater value to the property you are selling. You must use a Qualified Intermediary to facilitate the exchange. It must be an independent third party, and thus cannot be you CPA, Attorney, Realtor, etc. You have a total of 180 days to complete your exchange. This means that you must close on all intended purchase within 180 days of closing on your sale. You must identify up to 3 possible replacement properties within 45 days of closing on your sale. So while times have changed, the rules of exchanging are still the same. Knowing about 1031 exchanges can prove to be a valuable tax-saving opportunity for you or someone you know.

Theresa Knower 4560 Via Royale #1 Fort Myers, FL33901 239-333-1031 ext. theresa@1031company.com

an entruSt SelF-directed ira haS a Good deal oF Gold. Did you know your self-directed IRA can purchase gold? This has become a growing trend among clients. For more information, please visit www.entrustgoldira.com

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



thE totAL ControL irA
By Brandon Hall, CISP Ever since IRAs were established in 1975, Wall Street has convinced investors that stocks, bonds, and mutual funds are the best and only way to create long term wealth. You could choose or “self-direct” your IRA investments, as long as you chose what they were selling. But what about other choices to build wealth? What about buying raw land, rental property, lending money, or starting new business ventures? Since these assets are not traded on the major stock exchanges, there is little incentive for commission-based sales people and their brokerage houses to publicize their availability. Knowledgeable, high net-worth individuals have known about broader choices in their IRAs for years. Due to the internet and educational outreach of self-directed IRA administrators such as Entrust Freedom, the general public is beginning to awaken to the power of choice as well. Many people hear the term “self-directed” IRA and think that it is a special type of IRA. However, in reality, the IRS doesn’t recognize a “self-directed” IRA as a type of IRA. Any IRA, whether it be a Traditional, Roth, SEP or SIMPLE IRA can be Self-directed. The key to TRUE self-direction is the administrator. If you want to invest in real estate, for example, you don’t need a special IRA. You need a special administrator. For over 28 years, Entrust Group has been providing self-directed IRA administration without the limitations of the typical brokerage houses. There are a few regulations and limitations that the IRS places on IRA accounts. Your IRA is not allowed to invest in Life Insurance or Collectibles. Also, your IRA cannot invest in anything that provides a benefit to you or your linear descendents. For example, the IRS would prohibit an IRA purchasing a vacation home that the IRA owner wants personal use of. A rental home could be purchased by an IRA, but the tenant must be unrelated to the IRA owner. Also, the rental income would need to be paid to the IRA, not the IRA owner. There are a lot of savvy investors that come up with creative ways to use their IRA. At Entrust Freedom, we are more than happy to discuss these options with you. While we cannot give direct financial advice, we can discuss available options and provide important information in regards to IRS regulations. For instance, did you know that an IRA can partner up with other IRAs or even non-IRA money to purchase an asset that is more than the IRA can afford alone? Did you know an IRA can borrow money through a non-recourse loan? Feel free to take advantage of the knowledge that the professionals at Entrust can provide. We are always available to answer any questions you may have and eager to help you on the road to self-direction. Brandon Hall, CISP Director of Operations Entrust Freedom 4560 Via Royale #1 Fort Myers, FL33901 239-333-1031 ext. 211 brandon@entrustfreedom.com

how healthy iS your retirement portFolio?
Call Entrust Freedom today to learn how a self-directed IRA may be just what the doctor ordered to help you reach your retirement goals. 239-333-1031 or www.entrustfreedom.com

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



GoAL sEttinG is s.m.A.r.t. businEss
By Heather Christie, Action Coach Goal setting is as important in personal life as it is in business. The common denominator in all the self-help literature and books is the importance of goal setting. We’re told to set long-term goals, short-term goals, lifetime goals and personal goals. The benefits of Specific, Measurable, Achievable, Results orientated, Time-framed (S.M.A.R.T) goals have been written about in self-help books for years. So, it follows that goal setting is obviously a powerful process. It is about ‘laying a foundation one brick at a time’ and turning vision into achievable, actionable things. It’s the common denominator of successful individuals and businesses. Despite their obvious value, our experience with goals has shown that while some people are good at setting goals and achieving great results, others can’t keep a New Year’s resolution to stop smoking for two days in a row. Failure to set goals can be seen as a fear of failure. That is, the blow to our integrity when we don’t reach our goals prohibits us from setting them in the first place. When we don’t achieve our goals, we lose confidence in our ability to make and keep commitments and to trust ourselves. However, when we make and keep commitments, such as setting and achieving goals, it reflects the amount of trust we have in ourselves. We increase our confidence in ourselves to make and keep commitments to others and ourselves. There are many reasons why we don’t achieve our goals. Sometimes the goals we set are unrealistic. New Year’s resolutions are typical examples. Suddenly, we expect to change the way we eat or the way we exercise just because the calendar changes. It’s like expecting a child that’s never ridden a bike to suddenly jump on and go or to run a marathon without months of training. These goals are based on illusion with little regard to natural growth. You must be able to crawl before you walk. So, how do we set and achieve goals? Stephen R. Covey says it best in his book 7 Habits of Highly Effective People. “To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now so that the steps you take are always in the right direction.” An example of a S.M.A.R.T. goal might look something like the following: WHAT My goal is to maintain a healthy body. WHY So that: I can be fit to do the things I enjoy. I can be an example to my children in health management. I can build my personal character strength. HOW Good Nutrition. I will increase my intake of fresh fruits and vegetables and decrease my intake of sugar, fats, salt and red meat. Physical. I will exercise aerobically 3 times a week for 30-minute periods. Focus. I will be aware of my body and look out for any health problems. By concentrating on the smaller, short-term steps and achieving success at those, you will gain confidence to set other goals. So, remember, set your goals based on the S.M.A.R.T. principle to have the best chance of achieving your goals. If you would like learn more about how you can set and achieve the goals within your business, call your local Action coach Heather Christie at 239-220-5900. For more information on ActionCOACH, you may visit our website at www.ActionCoachFLA.com. Business Coach Heather Christie Professional Business Advisor/Attorney ActionCOACH & Phoenix Law 12800 University Drive, Suite 240 Fort Myers, FL 33907 Direct: 239-322-1481 or Cell: 239-357-4052 Fax: 239-220-5901

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



thErE ArE stiLL oPPortunitiEs to sAvE on your tAxEs in 2009
By Randy Wright, CPA While many changes have recently been enacted and more are sure to come, there are still some things you can do to save on your taxes in 2009. The following is a list of tax planning opportunities, some tried and true tips and some new ideas to help minimize how much you pay in taxes this year. Please feel free to call me with specific questions about your situation. For Individuals: • Deduct state and local sales and use taxes instead of state and local income taxes. • Take a standard or itemized deduction for state sales tax and excise tax on the purchase of vehicles. • Utilize the above-the-line deduction for qualified higher education expenses. • Take advantage of tax-free distributions for those age 70 1/2 or older from IRAs for charitable purposes. • Use the $8,000 first-time homebuyer credit, if qualified. • Increase the amount you set aside for your health flexible spending account. • Realize losses on stock while preserving your investment position. • Postpone income until 2010 and accelerate deductions into 2009. • Consider converting traditional-IRA money into a Roth IRA. • Consider using a credit card to prepay expenses that can generate deductions this year. • Accelerate big ticket purchases into 2009 for sales tax deduction. • Make energy saving improvements to your residence to qualify for tax credits. • Save gift and estate taxes by making gifts sheltered by the annual gift tax exclusion. • If you receive Social Security benefits, you can take steps to reduce tax on your benefits. • Donate appreciated stock. • Boost your margin interest deduction by taking shortterm gains. Randy Wright, CPA Marham Norton Mosteller Wright Fort Myers, FL 239-433-5554

For Businesses: • If you own an interest in a Partnership or S-Corp you may need to increase your basis in the entity so you can deduct a loss from it for this year. • Make expenditures that qualify for the business property expensing option. • Make expenditures that qualify for 50% bonus first year depreciation if bought and placed in service this year. • Defer a debt-cancellation event until 2010. • Worker, Homeownership & Business Assistance Act For Individuals: The first-time homebuyer tax credit [FTHTC] has been extended until April 30, 2010 and, with a valid contract, closing may occur as late as June 30, 2010. • The FTHTC can’t be claimed unless a taxpayer is 18 or his/her spouse meets that requirement. • The FTHTC can’t be claimed by a taxpayer if (s)he can be claimed as a dependent by another taxpayer for the tax year of purchase. • A new FTHTC credit of $6,500 for prior homeowners if you’ve maintained the same home for five consecutive years out of the last eight before buying the new residence. For Businesses: • The expanded period for the carry-back of Net Operating Losses [NOL] has been extended. • The NOL can be used to offset up to 50% of the taxable income for the fifth tax year preceding the loss, and 100% of taxable income in the remaining four carry-back years. • It allows the opportunity to revoke a previous waiver of the carry-back period. The taxpayer has until the extended due date of its last tax year beginning in 2009 to make the election.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031


roth 2010 is At hAnd
Major changes are coming to retirement accounts in January, 2010. If you are not familiar with ROTH IRAs, read on. Roth IRAs are one of the most unique and popular retirement planning tools. Roth’s have a great feature that not only allows retirement earnings to grow tax free but when the funds are withdrawn, the distributions are tax free! With a traditional IRA, the distributions are usually 100% taxable. The down side of a Roth is that money going in to the account goes in post tax, which means you do not get a tax deduction on the contributions. But beauty of the Roth is that if you grow the account, all withdrawals will be tax free to the beneficiary. Many taxpayers are currently locked out of ROTH IRAs and not allowed to have one. If you have adjusted gross income of greater than $100,000, you cannot convert your Roth IRA to a Traditional IRA. Effective January 1st, the law will allow everyone, no matter what your income is, to convert to a Roth IRA and start making contribution. Please note if you do not have an earned income you cannot put contributions in a ROTH. Please consult your tax advisor for the details of this particular case. In January, 2010, you will be allowed to convert your Traditional IRA to a Roth no matter what your annual adjusted gross income is. • The benefit of converting lies in the fact that distributions from a Roth are tax free versus taxable in a Traditional IRA. Below are some examples of when a conversion would be favorable. • Asset value of retirement assets appreciates from time of conversion • Increasing income tax rates • Ability to pay the income tax on the conversion from assets outside of the Roth IRA, and no future need for the Roth IRA • No need to ever withdrawal from the Roth IRA • Ability to pay the income tax on the conversion from assets outside of the Roth IRA, and no future need for the Roth IRA • Passing wealth to family • Longer life expectancy of the participant after conversion • Roth’s have many benefits that Traditional IRAs do not have. These benefits include the opportunity to make contributions after age 70 ½, something you cannot do with a Traditional IRA. Also, a Roth IRA is not subject to Required Minimum Distributions (RMDs) so money can be left in the IRA to appreciate. And finally, a Roth may be left to a beneficiary tax free. This can be a huge estate planning tool for many retirees. If you are considering making a conversion, there are several factors that must be considered. Value of the asset being converted – Based on current market condition, it might be an excellent time to do a conversion. When you do a conversion to a Roth, you do have to pay regular tax based on the current value. If you own a piece of land in your IRA, now maybe the time to do the Roth conversion because most values are down and this will minimize the taxes due. If you own gold, you might want to hold off because gold prices are at an all time high. As noted above, you will have to pay income tax on the converted amount but you are not subject to IRA early distribution penalties of 10%. (*When you convert a traditional IRA to a Roth, the conversion is taxed at the current Fair Market Value. What is fair market value?- IRS Definition of FMV - “The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” ) Do you have the money to pay the tax on the conversion? Typically you do not want to use IRA conversion money to pay the tax. It is best to use personal funds so that all tax sheltered retirement money can continue to grow tax free. What will your income be in the year of conversion? If you know that your income will be down in 2010 that might be a better year to convert versus future years when the income is greater. When you do a conversion you are still taxed but try to do a conversion when you are in a lower tax bracket. Finally any Roth Conversion in 2010 will let you defer the tax payment for two years. This is a special one-time tax law change. So if you do a conversion in 2010, you will report no income in 2010, half the conversion amount as income in 2011 and the other half in 2012. That means the final tax payment could be delayed until April of 2013.

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031


Let me give you an example of the tax consequences with a Roth IRA with the new tax law: Bill decides to do a Roth Conversion. He has a lot in an IRA worth $25,000 on 1/1/2010 The lot is appraised on 1/1/2010 – Traditional IRA is converted to a Roth 2010 – No income is picked up 2011 - $12,500 in income is picked up, tax paid in 2012 2012 - $12,500 in income is picked up, tax paid in 2013 Roth IRAs and the upcoming law change can be a boom for taxpayers. Rarely does Congress make opportunities like Roth IRAs available to all taxpayers. It is worth evaluating Roth 2010 to see if it can benefit you. Please consult your tax advisor before doing a Roth Conversion. Everyone has a unique tax situation so please take the time to learn the law and understand these changes.

Dave Owens, Managing Member 4560 Via Royale #1 Fort Myers, FL33901 239-333-1031 ext. 203 239-466-5496 Fax owens@entrustfreedom.com Dave Owens, CPA, CES, is the managing member of Entrust Freedom, LLC. If you have any questions about this article and would like more information please feel free to contact the author. Dave can be contacted at owens@entrustfreedom.com or 239-333-1031. Dave has been a practicing tax accountant for over 20 years.

retirement StatiSticS - dec., 2009
Retirees who have a formal written plan for retirement


People aged 55 or older that have less than $100, 000 in their retirement account.


Represents the fraction of employees that cash out their 401K when leaving their job instead of rolling the funds to an IRA to avoid tax implications.


Employees who say that they are willing to cut back their spending to save for retirement.

2 in 5

Employees that do not expect their standard of living to decline upon retirement.


amount of income that social security will replace for a couple making between $50K – $100K. That is, if social security is still around when it’s time to retire.


Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031



who to CALL?
ContACt PAGE Entrust FrEEdom, LLC
Dave Owens, CPA, CES, Managing Member Call for 1031 or Self Directed IRA information Phone 239-333-1031 x203 or Email owens@1031company.com Brandon Hall, MBA, CISP Self Directed IRA questions and technical issues Phone 239-333-1031 x211 or email at Brandon@entrustfreedom.com Theresa Knower, CES, Chief Operating Officer 1031 Exchanges and all real estate closings Phone 239-333-1031 x207 or email at Theresa@entrustfreedom.com Austin Hardy, MBA. Director of Marketing and Business Development Self Directed IRA questions Phone 239-333-1031 x212 or email at Austin@entrustfreedom.com Doug Robertson Self Directed IRA purchase and sale transactions Phone 239-333-1031 x205 or email at doug@entrustfreedom.com Aaron Prida, MBA North Florida Representative—Self Directed IRA questions/new accounts Phone 352-378-7833 or email at aprida@entrustfreedom.com Daniel Fisher Self Directed IRA questions and new accounts Phone 239-333-1031 x210 or email at daniel@entrustfreedom.com Tricia Enke Accounting and Bill Paying Phone 239-333-1031 x208 or email at tricia@entrustfreedom.com

Entrust Freedom, LLC, 4560 Via Royale, #1, Fort Myers, FL 33919, Phone: 239-333-1031


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