Using Retirement Account to Invest in Real Estate

[Michael Hurdle]

Greetings. Does anyone have experience with using his/her retirement account to invest in Real Estate? If so, does the entire profit amount have to go into the retirement account or just the amount that is used from the account?

Thanks

[Dmitriy Fomichenko]

@Michael Hurdle 

when investing with retirement accounts, all of the gains, profits, income, cash flow, etc. must go back into the account. At the same time all of the expenses related to the investment must be paid from the account. 

This topic has been discussed here on BP Forum extensively in the past. Please search the forum and get yourself educated before you jump in to do it. 

[Loren Whitney]

Hi @Michael Hurdle 

Regardless of whether or not its a cash purchase or a financed deal, if the IRA is the owner of the property, all income and expenses must pass-through the IRA. For example, all rents or sale proceeds would flow back to the IRA. You would then have the choice to take distributions from the account.

[Peter MacKercher]

1. Maintain Your IRA Investment (How Income and Expenses Flow)
   All payments/profits related to an investment in your self-directed IRA must be made from your IRA and return to your account. In addition, all expenses related to your investment must be paid from your self-directed IRA.
2. Sell Your IRA Investment - Negotiate the sales terms and complete an investment form instructing us to sell on behalf of your IRA. Proceeds from the sale return to your self-directed IRA tax-deferred or tax-free, available to you again for future investments