I just inherited a home from my deceased parent. The title is free and clear. I want to sell it and invest the funds into an IRA. Can I do that? What would be the tax consequences?
Welcome to JA! I will do my best to help you. Please be aware, however, that I am only able to provide information and cannot offer specific advice!
Good morning. The basis of property is increased to its fair market value at the date of the death. Thus, a later sale of the property at that fair market value would result in no gain and therefore trigger no tax. Once the property has been sold, the funds can be invested in any manner the seller chooses.
I hope this has given you information that has been helpful to you. If the information seems more general than specific, please be aware that we are only allowed to provide information and not specific advice.
If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping others or taking a break.
If I have adequately answered your question, even though the answer might not have been the one for which you hoped, I would appreciate it if you would please click the GREEN ACCEPT button so that I receive credit for my work; otherwise, though you have made a deposit, I do not receive credit.
If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you. Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.
Can the entire amount of the sale of the home be placed in a self directed IRA?
It would be subject to the contribution limits of an IRA.
can we do a 1099 exchange?
I will have to opt out at this point because this is outside of my sphere of expertise.
Hi and welcome to Just Answer!
These two transactions - selling the house and contribution into IRA (or self-directed IRA) - are separate transactions.
For 2011 and 2012, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:-- $5,000 ($6,000 if you’re age 50 or older), or -- your taxable compensation for the year.
Let me know if you need any help.