Use Your IRA for Real Estate Investments
There are four main differences between purchasing real estate for yourself and for your IRA:
- Title: When purchasing an asset for your IRA, it must be properly titled to your IRA trust company as custodian for the benefit of you. You need a IRA trust company to serve as your real estate IRA custodian because the IRS does not permit you to personally “touch” your self-directed IRA account.
- Funding: When purchasing an investment (or any portion of an investment) for your IRA, funds must come directly from your IRA. The IRA trust company will send the funds directly to the seller or his agent, per your instructions.
Expenses/Income: Any expenses associated with your IRA investment must originate in your IRA account and any income must be remitted to your IRA account. Rental payments are remitted to the IRA trust company for the benefit of your IRA. You may use funds from your IRA to renovate property.Signatures: Documents for your IRA investments must be signed by the IRA trust company.
For further information regarding real estate IRAs, see https://www.wny-lawyers.com/pamphlets-mentioned-in-robert-friedmans-newspaper-column/