Can I use my Traditional IRA to buy Investment Properties?

[Kevin Kim]

Hello Everyone,

After doing some research, I've learned that an individual is allowed to take out a maximum of $10,000 from your Self Directed IRA to purchase your first home without any penalties. Of course this would mean that I would have to pay taxes on the funds withdrawn.

However, would this apply for a property that wouldn't be my primary residence? I am thinking about using a portion of my Traditional IRA for a down payment on an investment property outside my state. Is this possible?

[David Dachtera]

No - life events are NOT (usually) necessary for roll-overs, but check your employer's plan's SPD (Summary Plan Description).

You can keep the existing account open, and your employer (or you) can continue to contribute to it. You only rollover the value, not the account itself.