|
Q.Should You Consider Buying Real Estate in Your IRA
A.An increasing number of IRA’s are switching their funds from mutual funds, stocks and bonds to real estate through Self-Directed IRA accounts held by a custodian and managed by the IRA’s owner. So long as the Self-Directed IRA does not have debt financed income, it will not pays any taxes on the profits generated, not even rental income.
Owning real estate in an IRA, however, is not for everyone. In fact, I would say it is for only a few because the real estate owned by an IRA cannot be used as a primary residence, vacation home, or the IRA owner’s place of business. However, if you have significant wealth in an ordinary Roth IRA or Roth 401(k), the enhanced growth potential you could realize from both rental income and the sale of a property (including land, apartment buildings, commercial buildings, hotels, shopping malls, etc..) should be examined.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this web site is not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed on a taxpayer under the U.S. Internal Revenue Service.
|
|
