What is a Real Estate IRA?
A real estate IRA is a self-directed individual retirement account invested in real estate.
What types of real estate? With your IRA invested in real estate, you can invest in assets like REITs, trust deeds, mortgage notes, and more.
Invest in real estate with your IRA now by opening an account.
Benefits of Holding Real Estate in an IRA
- Diversification of retirement funds
- Tangible assets that will always be worth something
- The real estate gains all the tax benefits of an IRA
Real estate is a diverse asset within self-directed investing. The types of real estate you’re able to invest in are almost limitless.
- Single-family rental homes
- Commercial properties
- Joint ventures
- Trust deeds
- Tax lien certificates
- Mortgage notes
- Limited partnerships
- Building bonds
- Raw land
- Foreign rental properties
- Multi-unit homes and apartments
Schedule a free one-on-one consultation, don’t invest alone
Speak with one of Accuplan’s premier Real Estate IRA experts and get started today
Self-Directed IRA Real Estate Rules
To effectively operate a real estate individual retirement account, general knowledge of the rules and regulations set by the IRS is essential.
These rules are imperative to follow since violating them can put the tax-advantaged benefits of your self-directed IRA at risk of being distributed, and hefty IRS fees incurred.
Commonly broken rules of investing in real estate include:
A prohibited transaction is defined as the sale, exchange, or leasing of property between an IRA and a disqualified person. They can also be stated as transferring IRA income or assets to the benefit of a disqualified person.LEARN MORE
Disqualified persons cannot conduct any business with you or your IRA account, and they cannot directly benefit from the property.LEARN MORE
Personal Use of Property
A rental property purchased through a self-directed IRA is legally owned exclusively by the IRA. The IRA owner is prohibited from spending even one night on the property, according to the IRS. Doing otherwise can disqualify the entire IRA.
UBIT and UDFI
There are circumstances where Unrelated Business Income Tax and Unrelated Debt-Financed Income tax apply to the assets within your IRA.LEARN MORE
Repairs, upgrades, minor fixes, or improvements are all a part of managing real estate, but when your self-directed IRA is the property owner, you may run into Sweat Equity rules.
Penalties Associated with Prohibited Dealings
Under Internal Revenue Code section 4975(a), the standard rule is that if a prohibited transaction occurs, there is a starting penalty tax of 15% of the amount involved in the transaction, which is imposed on any disqualified person engaged in the prohibited transaction. And if the prohibited transaction isn’t corrected within the current tax year, the penalty tax increases to 100% of the transaction amount.
Gain valuable insights for real estate investing through our Real Estate IRA Guide
There are multiple ways to fund the purchases of an asset. You can:
- Direct purchase with IRA funds
- Purchase with a non-recourse loan
- Partnerships with other IRAs
Why Accuplan is Different
We have been serving real estate investors for over 25 years. Real estate is the most sought-after asset by Accuplan investors, so we have naturally built our self-directed IRA program to best suit real estate.
Experience and Foresight
Working with thousands of individuals who invest in real estate with their IRA has enabled us to craft a perfectly tailoring platform to real estate IRAs. We know the pain points and frustrations that can come with self-directed investing because of our vast experience. Let our expertise provide a seamless experience with real estate in your IRA.
Trusted Over the Decades
We exercise the utmost care and discretion with every client interaction. Our products are state-of-the-art in security and ingenuity. With over $2 billion in assets under our management, we promise to deliver expertise and respect along with a personalized touch.LEARN MORE
Frequently Asked Questions
Yes, it’s the most sought-after asset among Accuplan’s investors. Regular IRA providers don’t offer real estate as an asset option, so it may initially seem like it would not be allowed. Still, if the IRA owner follows all IRS rules and regulations, it is 100% allowed.
In uncertain times, real estate can be a stable investment. Real estate as an investment provides an income to the owner and appreciation to the market.
Funding a real estate purchase with your IRA can be made in many ways—partnerships with other IRAs, non-recourse loans, and more. Learn more here.
No. Living on a property your IRA owns is considered a prohibited transaction by the IRS.