Finance Questions? Ask a Financial Expert for Answers ASAP
Hi, I can help with this ....yes you can by real estate INSIDE the IRA
You have to be VERY careful because with IRAs there what the DOL (Dept of Labor ) calls prohibited transactions and there are also disqualified persons
I would recommend first doing a transfer to n IRA custodian that has expertise in Real Estate Investments inside IRAs
First, lets think through the things that are typically done with real estate investments that the IRA doesn't allow ... The business of running the IRA has to be done COMPLETELY insider the IRA, so ..... no deduction for expenses like property tax
Sell the Property (THAT's GREAT, NO TAX)
But take the money out of the IRA and that’s added to your income for the year…plus a 10% penalty on those withdrawn dollars, if you under age 59 and ½
And you can’t use any depreciation for any equipment or anything else that might be in that IRA
So you have to remember that everything has top be done, essentially, inside the shell of the IRA,
thanks. Reading your response. will be back in aminute
SURE you can rent the property ... but the dollars need to stay inside not to be taxed and penalized AND there has to be enough cash in there to run the business ...... remember that you can only contribute 5000 per year to the IRA (However, you can roll other IRA or 401(k) dollars into the IRA, but the contributions are limited to the yearly IRA contribution limits)
Great response. Thanks for sharing the things within IRA shell (ir no deductions, etc.. I am cool with all these.
Do you have any pointers on where and how to find "IRA custodian that has expertise in Real Estate Investments inside IRAs"?
Don’t get me wrong,… if you do it right you may be able to FAR surpass the rate of return you would get using stocks bonds or CDs and MMs
THe best one I know of (I have no connection, I have clients that have used, is Pensco. thy know all of the rules and have attorneys that know all the rules
Woops hit 4 bu mistake ... should be just
Now, we haven't talked about disqualified persons and prohibited transactions...this is where you can really mess up (although, again, a good self-directed custodian knows this stuff) but ...
Perfect, yes, I fully agree on returns on REOs. It is simply the best time of our life. I baught an REO for 200K 3 years back, 50K down, rest loan. It gives me $600 PM cash flow, and now worth 300K. thats $100 appreciation and 12% annual return.
Going forward from now, with the rental marked growing this could be an excellent idea
100% percentt. Simply amazing. Shared this with many of my friends. They all are enjoyings ame benifts
yep, I have an office builling MUST, however, give you this (for doing it inside the IRA)