FAQ - What is a QRP

Self Directed 401kWhat is a QRP

Are self directed QRP’s for everyone?

Self directed QRPs are not for everyone. They are not for people who do not want to take responsibility for their financial outcomes, and would rather pay the fees that Wall Street leverages on their accounts.

What is a QRP

Are my self directed QRP investments guaranteed?

No investment (aside for FDIC-insured deposits) is guaranteed. However, most successful investors feel that the risk of investing in assets they know and understand is much less than the risk associated with making only conventional investments.

What is a QRP

My CPA/attorney/financial advisor hasn’t heard of The QRP? What Should I Do?

It’s not uncommon for advisors to never have heard of self-directed qualified retirement plans. We have worked with many professional advisors across the country to educate them regarding QRP’s and self directed QRP rules so they can give good financial advice to their clients.

What is a QRP

How can I be sure that my investment is allowable in a QRP?

IRS Publications state what investments are prohibited in Qualified Retirement Plans. These investments include: artwork, stamps, rugs, antiques and gems. All other investments, including stocks, bonds, mutual funds, real estate, promissory notes, foreclosures, and tax liens are acceptable as long as IRS rules governing retirement plans are followed.

What is a QRP

Are there special rules for The QRP investments?

Yes. To ensure compliance, you should be familiar with specific rules for 401(k)’s and in particular, self-directed 401(k)s. There are certain types of transactions that you cannot perform through a 401(k). Most importantly, the IRS prohibits “self-dealing” investments in which you or family members of lineal descent have prior ownership.

What is a QRP

Is the eQRP allowed under IRS rules?

Yes, as long as you follow relevant rules. IRS Publication 560 and 590 clearly state the rules and regulations governing IRAs and qualified retirement plans.

What is a QRP

Why haven’t I heard of The QRP before?

While the concept of investing in real estate and other assets in retirement plans has been around for more than 30 years, it hasn’t received a great deal of attention. Why? Most custodians that offer 401(k)s (banks and brokerage firms) focus on mutual funds and CDs-because they have financial interests…Click for more

What is a QRP

Are there any negatives of The QRP?

The QRP does require more administration than something like an IRA. Since you, the business owner, will typically be the trustee in a QRP, you have a fiduciary responsibility to protect assets. This responsibility is not normally required in an IRA that has a third party custodian.

What is a QRP

What are the benefits of The QRP?

In addition to the tremendous 401(k) benefits already discussed (tax-free profits, tax deductions, asset protection and estate planning), you can invest tax-free in investments that you know and understand, which through the power of compounding interest, can create additional wealth for you and your family.

What is a QRP

Why Have a Qualified Retirement Plan?

Unlimited Options & Tax Deferral A QRP offers a business owner the ability to use his retirement funds to make virtually any type of investment tax-free, including real estate, on his own without requiring the consent of a custodian. The IRS only describes the disqualified investments, and very few at…Click for more

Total Control Financial