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Updated over 5 years ago on . Most recent reply

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3
Posts
3
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Brian Leonard
  • Architect
  • Edmonds, WA
3
Votes |
3
Posts

Furnishing a Self-Directed IRA Purchased Rental

Brian Leonard
  • Architect
  • Edmonds, WA
Posted

A few years ago I converted a few 401K's into one self-directed/checkbook IRA. I setup an LLC that facilitates the financial transactions on behalf of the IRA.

I recently purchased a vacation rental via the LLC, from which the proceeds will go back into the IRA account. My question:

Assuming all purchases are made via the IRA LLC, I'm assuming I can furnish the rental, and this would not be considered a "prohibited transaction"?

Thanks in advance.

Most Popular Reply

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67
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171
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John Hyre
  • Accountant / Attorney
  • San Juan, PR
171
Votes |
67
Posts
John Hyre
  • Accountant / Attorney
  • San Juan, PR
Replied

@Justin Windham  and @Dmitriy Fomichenko.  Thanks for the thoughtful answers.  One of the reasons I love SD 401k's - a small error such as inadvertently providing a "service" doesn't blow up the entire account.  PT's are penalized, but nearly as heavily as is the case in an IRA.

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