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Some of you have been asking questions about different aspects of your IRA, if you read on I will do my best to answer them. (1)Can my IRA buy property that I already own? The answer is a definite no. That would be a prohibited transaction, you may not buy a property from yourself or any members of your family or your wifes family. (2)May I use property that my IRA owns as a vacation house? The answer again is a definite no. This again is a prohibited transaction. (3)Can my IRA buy a property that my LLC owns? No, this is also a prohibited transaction. (4)How long does it take my IRA custodian to complete the paperwork when I buy a property? The time may differ with different companies, but on the whole you will probably have your paperwork completed in about three whole business days. (5)Can I roll over my 401(k) account to a self directed IRA to buy real estate? Yes, this is an allowable transaction. (6)May I use money from my IRA account to rehab a property so that I can make more money on that property? Yes, that is allowed under the IRA rules. Although all proceeds must be returned to your IRA. (7)If I buy a rental property with my IRA, does the rent from the property have to go back into my IRA account? Yes, all the money that comes from rents must be returned to your IRA. (8)How do I go about selling a property that is owned by my IRA? You can sell a property that is owned by your IRA by asking your IRA custodian, to fill out the necessary documentation, he will already have your original documents. (9)Can my IRA invest in a LLC that is going to invest in real estate? Yes that is an allowable transaction. (10)When I sell a property that I have in my IRA, can I keep some of the money and send the rest to my IRA? No, that is a prohibited transaction. All the proceeds of a property that has been sold in your IRA must be returned to your IRA. This would be a good time to mention some prohibited transactions, even at the risk of repeating myself. You or your family, including your wifes family cannot sell to or buy property from your IRA. You cannot use your IRA as security for a loan. Buying property for personal use with your IRA is prohibited If you indulge in a prohibited transaction you risk disqualification of your IRA. The IRA could stop being treated as an IRA on the first day of the year that you incur the wrath of the IRS. The account is then regarded as if it had distributed its assets to you at fair market value. You then incur taxes plus a ten per cent penalty. If buying real estate with the attending risks seems too much trouble, there is a simpler more TURNKEY approach. Just go to the url at the bottom of this article, from there to my website, you will find much more information about real estate and IRAs there.
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