Your Most Important Real Estate IRA Investing Questions Answered

Your Most Important Real Estate IRA Investing Questions Answered

Most people have the same questions about how to use their retirement funds to purchase real estate. The goal of many investors is to diversify at least a part of their retirement portfolios out of stocks and bonds and into real estate. Knowing the process and rules to purchase real estate in your retirement fund is critical. Below are some of the most important real estate IRA investing questions answered.

Conversations usually go something like this:
  • Yes, you can purchase real estate IN your retirement plan instead of stocks or bonds. Often people call plans that invest in real estate a “real estate IRA.”
  • No, it will not be a taxable event. The real estate investment is owned just like a stock or bond as a tax sheltered asset in your retirement fund.
  • Yes, that means you can use all that cash you have been saving for years in your retirement funds to purchase real estate.
  • Yes, it is legal. The IRS specifically says real estate is an allowable investment in your retirement fund. The quote on the IRS website is: “IRA law does not prohibit investing in real estate but trustees are not required to offer real estate as an option.” http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-IRAs-Investments
  • No, you and your lineal relatives (ascendants and descendants) cannot use the property. It must be investment only/no personal use if you want to purchase it using retirement money. Funny enough, the IRS has no problem with your real estate IRA renting/buying/selling to non-lineal relatives (brothers, sisters, aunts, uncles, cousins, etc.).
  • No, you cannot sell a property you own already to your retirement fund, your retirement fund has to buy/sell/rent to arms-length third parties.
  • Yes, I know your broker/CPA/attorney has not said anything about this to you, they have probably never heard of a self-directed retirement
  • Yes, your retirement account at Midland will own the property, it pays all the bills and gets to collect all the income gained from renting it out or selling the property.
  • Yes, the income really is tax sheltered as long as it returns to your retirement account and doesn’t go to you pe
  • No, there is no limit to how much profit you can make from real estate deals in your retirement fund, the government only limits how much money you can annually contribute (take out of your personal pocket and put in your retirement fund).
  • Yes, an IRA with us is just like an IRA at any other institution. That means if you take money out of the IRA account you might have to pay taxes on the distribution depending on the type of IRA you have.
  • Yes, self-directing a retirement plan easy to do. To get started, fill out our application here https://apply.midlandira.com/ and we will open a retirement account for you.

For more information visit MidlandIRA.com or call 877-944-5472.