Self Directed IRA Real Estate
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Key Restrictions
Investing self directed IRA funds in real estate is not for every
investor and there are certain rules and regulations which you need
to understand before considering this type of investment.
Fundamentally, the IRA account owner must understand that the
property is held by the IRA for investment purposes and the account
owner cannot receive any direct or indirect benefit from the
investment. The individual must understand that there are
transactions that are prohibited between the account owner and
any disqualified persons. Prohibited transactions are described in detail in IRS Publication 590 and Internal Revenue Code Section 4975.
Investors are encouraged to consult with a tax and legal advisor(s) to ensure the transaction does not violate any of the prohibited transaction rules.
Causing a prohibited transaction to occur could result in dissolution of the tax-advantaged status of the IRA, mandatory distribution of the
self directed IRA, and taxes and penalties on the distribution.
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