Did You Know You Can Use an IRA to Invest in Real Estate?

Did you know you can use a Self-Directed IRA to invest in Real Estate? The IRS allows you to invest self-directed IRA funds into real estate. This gives you the power to use retirement funds for tangible investments that YOU control.

As a Georgia Realtor, I am careful not to give legal advice or pretend to be an expert in a field in which I have no expertise. I will, however, refer clients to the proper authorities and professionals who can give them the assistance they need. Having said that, this post is in no way giving legal advice of any kind nor do I pretend to be the expert in purchasing real estate through an IRA. This post is to serve as a general guideline. You are encouraged to contact a financial planner or qualified intermediary.

There are six rules for a Self Directed IRA

1. You may not personally own the property purchased by your plan
2. You may not use your IRA improperly by making sure your purchase is not a prohibited transaction as specified in the IRS code
3. Your property purchase must be for investment purposes only
4. You may not purchase property previously owned by a spouse or family member (brother and sister is allowed)
5. No family members (other than brother and sister) are allowed to live in or lease the property while it's in your plan
6. You may not locate your business on or lease any part of the property while it's in your plan

Other facts about using your IRA to purchase Real Estate

• If the property purchased generates rental income, the income generated by the property will go back into your IRA
• Financing with a lender through your IRA is allowed
• All income generated from the sale of a property owned by your IRA must return directly to your IRA
• You may not purchase a property which is presently owned by a disqualified person (yourself, spouse, family member)
• You are allowed to buy any type of real estate as long as it is for investment purposes

Please Note:

There are differences between a 401K Rollover and a Self-directed IRA. Be sure to consult with a financial planner.

Using your IRA to purchase real estate for investment purposes is not the same as a 1031 exchange.

More information or questions may be directed to Southern Financial Services, Asheville North Carolina at 1-800-742-8167

Donna Yates, Georgia Realtor
Mountain Investments of North Georgia
706-633-0644 cell
donna@ellijay.com
www.move2northgeorgia.net