Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 2 years ago on . Most recent reply presented by

User Stats

2
Posts
1
Votes
Bob Sanders
1
Votes |
2
Posts

Is this legal use of a Self-Directed IRA

Bob Sanders
Posted

I am a real estate agent and property manager with about a dozen properties and I plan on growing significantly in '23 and '24. My brother is a financial advisor and he was telling me that he has an IRA and he regularly buys and sells stocks within his IRA and collects commission on those transactions as income. I have an IRA of my own with 100% stocks. I'm paying an advisor every time I buy or sell a stock. Would it be better to convert my IRA to a self-directed IRA and then pay myself the Realtor commissions for each property that I buy or sell within that IRA? That would be legal right? Like it's the same thing my brother does. I think I could do better with real estate than the stock market and I would limit each frictional transaction cost by getting paid a commission myself instead of paying someone else a commission.

Furthermore, would I be able then pay myself a 10% management fee to manage the assets within my self directed ira?  Would that be legal?  I think it would be but perhaps someone here has expertise or experience in this scenario.

I do not want to live in any of these properties nor do I want to sell or buy any of these properties to myself or a relative.  all positive monthly cashflow would be paid directly back to the ira (same with the converse scenario of potentially negative cash flow).

Frustratingly my accountant provided almost no guidance in this matter.  He said, "welp, make sure you do your homework on that."

I would think that paying myself a regular fee for the normal sale and management of a property within an IRA would be legit. But any guidance y'all can give would be appreciated.

Loading replies...