Real Estate IRA: How to do partial distributions?

[David B.]

I have been studying the Real Estate IRA concept for some time, have a pretty good understanding of how it works and its rules, and am getting ready to buy our first investment property with it, a single-family house.

Our goal is to buy a place we may eventually live in after retirement age. I understand we can divide up the distribution of the property across several years to avoid getting hit with a big tax bill in a high bracket all at once. One custodian I talked with said this is routine, and is handled through a quitclaim deed done by an attorney addressing the portion of the property that was distributed each year. Sounds reasonable, although some of the nomenclature (quit-claim deed, for instance) eludes me.

So now I am concerned about the real estate transfer tax, specifically in Florida. I am hoping I pay only the portion of that tax reflected in that year's distribution. Either that or I pay it all once the property has been distributed 100%. I just want to avoid paying the transfer tax on the full property value every year for several years.

I apologize for the long and complicated post, and hope someone can shed some light on this for me.

Thanks!

David