What is a Real Estate IRA?
“Real estate IRA” is a term used to describe a real estate investment(s) in a self-directed IRA or 401(k).
With a real estate IRA, you can earn tax-free/tax-deferred returns on your real estate investments.
What Types of Real Estate IRA Investments are Allowed?
The following is a partial list:
- Raw land
- Single-family homes
- Commercial property
- Mobile homes
- Real estate notes
- Second mortgages
- Partial notes
- Real estate purchase options
- Tax liens certificates
What Investments are Not Allowed?
The following rules govern investments in a real estate IRA:
- Your IRA Cannot Purchase Property Owned by You or a Disqualified Person
- You Cannot Put Any of Your Own Money Into the Deal
- You Cannot Have “Indirect Benefits” from Property Owned by Your Self-Directed IRA
- Real Estate IRA Investments Are Uniquely Titled
- IRA Investments that Use Financing Must Pay UBIT
- Real Estate IRA Expenses Must Be Paid from Your IRA
- Real Estate IRA Income Must Return to Your IRA
- For more information, see IRA Rules.