Subject To owned by SD-IRA?!

[Erin M.]

Question for the tax experts on BP!! I set up a SD-IRA and am considering the best approach for investing in real estate with the funds. I'm currently looking at a Subject To property that we would take over payments and hold as a rental. If the deed is transferred to my IRA Trust, is it acceptable to operate the rental from within that account? Thanks in advance!

[Dmitriy Fomichenko]

@Erin M.

Your self-directed IRA can buy an investment property subject to existing financing. The IRA custodian will be the new owner, on behalf of your IRA. The title will be held in a manner similar to this:

ABC Trust Company, custodian for Jane Doe IRA

You would hire a property manager to find the tenant and collect the rent. All rental income would be deposited to your IRA and all expenses related to this property (including loan payments) would be paid from the IRA.