Cashing out inherited ira to buy real-estate

[Russell Taylor]

Here is my situation. I inherited an ira and had to set up an inherited ira, non spouse. I am wanting to cash this out and buy more properties.  I talked to the company holding the ira and I don't have to pay the 10% penalty.   I do have to pay state and federal taxes.  I also realize I will be put into a higher tax bracket and be taxed as income. 

How can I take this money and put it down on a couple properties and use them to negate the tax obligations? 

Background information is that my wife and I have a high w2 income and also started an llc to mange a short term rental that we own. The str is coming along and isn't in a tourist area.  We have it paying for itself right now.  Still working on building that. 

We live near a lot of hospitals and are planning on using this money to buy small multifamily properties and renting them medium term with traveling nurses.  We have already had inquiries about turning the str into medium just for nurses. We would rather use money from the ira.   

Any help and suggestions are greatly appreciated. 

Also thanks to all the people that participate in the BP platforms.    My wife and I owe everyone for the enlightenment into investing.

We are invested in Louisville Ky by the way.

Thanks,

Russell

[Dmitriy Fomichenko]

Quote from @Rick Martin:

Can you rollover the inherited IRA into a self directed ira or solo 401k(if you are self employed) and continue to defer?

No, you can not rollover IRA that you inherited into your personal IRA or Solo 401k. Inherited IRA must remain to be inherited IRA. It remains to be in the name of the deceased. The beneficiary must distribute the entire IRA in 10 years.

However, you could convert an IRA you inherited into "self-directed inherited IRA" which would open up unlimited investment options, but you must still follow same distribution rules.