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Using retirement acct to buy RE
Old 08-05-2006, 11:15 AM   #1
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Using retirement acct to buy RE

Is there any type of retirement account that would let you use some of the money to purchase an individual piece of real-estate (i.e. a 2nd home that would be rented out)? or is this option generally not available?
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:37 AM   #2
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Re: Using retirement acct to buy RE

You can't put any of your "homes" in an IRA, but you can put rental property in an IRA.

Very few people do this because most of the time the cons outweigh the pros.
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:38 AM   #3
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Re: Using retirement acct to buy RE

Self Directed IRA's

Must be done “an arms length”

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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:40 AM   #4
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Re: Using retirement acct to buy RE

Quote:
Originally Posted by retire@40
You can't put any of your "homes" in an IRA, but you can put rental property in an IRA.

Very few people do this because most of the time the cons outweigh the pros.
I would check the reg's. If I remember correctly, you cannot place an existing home in a IRA, only purchase new homes. Yes, the can be rented but all fees and expenses must come from the IRA.

No Hype article:

http://www.bankrate.com/brm/news/sav/20010213a.asp
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:48 AM   #5
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Re: Using retirement acct to buy RE

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Originally Posted by PsyopRanger
I would check the reg's.* If I remember correctly, you cannot place an existing home in a IRA, only purchase new homes.* Yes, the can be rented but all fees and expenses must come from the IRA.
I did check the regs. You can't place a home in your IRA, but you can put rental property in an IRA, but the cons usually outweigh the pros, so most people don't so this.
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:50 AM   #6
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Re: Using retirement acct to buy RE

Quote:
Originally Posted by retire@40
I did check the regs. You can't place a home in your IRA, but you can put rental property in an IRA, but the cons usually outweigh the pros, so most people don't so this.
Sorry read your post wrong

I've heard the same, to much red tape and IRS problems.
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:51 AM   #7
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Re: Using retirement acct to buy RE

Quote:
Originally Posted by PsyopRanger
Self Directed IRA's

Must be done “an arms length”

OK, dumb question...aren't all IRA's self-directed?
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Re: Using retirement acct to buy RE
Old 08-05-2006, 11:55 AM   #8
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Re: Using retirement acct to buy RE

Can you purchase things like Real Estate, Gold, Limited Partnerships in your IRA?

Most IRA's only offer Stocks, Bonds, MF's.

Self Directed IRA allows you to invest in a wider variety of investments if that is your thing.
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Re: Using retirement acct to buy RE
Old 08-05-2006, 12:14 PM   #9
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Re: Using retirement acct to buy RE

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Originally Posted by OldMcDonald
OK, dumb question...aren't all IRA's self-directed?
Actually, good question.*

Not all IRAs are self-directed because you can not put any investment you want in most IRAs (like the ones you can get at your local bank).* For example, most won't allow you to buy real estate in them.

A self-directed IRA allows you to decide what investments you may place in them, such as real estate (that you and certain members of your family will not use personally).

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Re: Using retirement acct to buy RE
Old 08-07-2006, 09:29 AM   #10
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Re: Using retirement acct to buy RE

See this IRS publication for the rules on prohited transactions.

As retire@40 mentioned, there are lots of problems with having rental real estate purchased by an IRA.* For example, is the real estate leveraged?* You will have unrelated business income taxed at the trust rate on the portion of income attributable to leverage.

See this thread: http://early-retirement.org/forums/i...4011#msg114011
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Re: Using retirement acct to buy RE
Old 08-07-2006, 12:35 PM   #11
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Re: Using retirement acct to buy RE

yuou loose all the benefits of investment real estate in an ira...no depreciation write off,,,no low capital gains rates no write offs period.....its the worst deal you can get
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Re: Using retirement acct to buy RE
Old 08-07-2006, 01:47 PM   #12
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Re: Using retirement acct to buy RE

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Originally Posted by mathjak107
yuou loose all the benefits of investment real estate in an ira...no depreciation write off,,,no low capital gains rates no write offs period.....its the worst deal you can get
Even if you flip property in a Roth IRA and make $100K?

Sometimes it's not the worst deal you can get.
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Re: Using retirement acct to buy RE
Old 08-07-2006, 03:00 PM   #13
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Re: Using retirement acct to buy RE

if you can flip it and make 100,000 then your okay in an ira...if you cant your screwed
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