Any legal way to get house out of SDIRA?

[James Maher]

I purchased a house in February in my SDIRA(Roth) and after really running the numbers I now see that having a rental property in a SDIRA isn't really the best deal.  Basically taking a very tax friendly investment and putting it into a tax free account.  Anyways, this house is doing VERY WELL.  Rental income is 2.4% of the purchase price which is pretty high for my area.  In hindsight, I would have pulled the money from my Roth since all contributions can be taken out penalty free, and bought the house free and clear OUTSIDE of the SDIRA.  My current goals mean I need more money now than when I'm 59 1/2 to build my portfolio.

My question is, and I'm afraid it's NO, are there any creative ways for me to get the house out of the SDIRA?  Not looking for shady practice answers, just wondering if there are legal ways to do this.  I know that I can't just simply sell the house from the SDIRA to myself.

[Brian Eastman]

@James Maher

You can, as Mark has indicated, have the property distributed in-kind from the Roth IRA.

In your case, title for title for the property would first go from the IRA-owned LLC you have into the IRA, then from the IRA to you as a distribution.

If the property is performing well, why would you not want it in the IRA? You have the Roth IRA and it has to invest in something. If this property is performing better than investments you held in the IRA previously, then you have done a good thing for your Roth IRA and can hope to compound that tax-free money into a very large sum over time.