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Parents rental sale
My parents have a sfr rental property they are looking to sale. I’d like to purchase it but all my money is in my rollover Ira that I could find the purchase with. It would continue to be a rental for me as it is oos.
Question: Is there any way to structure this to fund the deal out of my ira?
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I hope some of the Self Directed Pros chime in, but I think you can NOT do this deal legally. Your parents are 'dis-qualified' to you in any way. It does not really matter if there are LLCs etc.... to my understanding.
There are some ways where you CAN do deals with a dis-qualified party, but it gets VERY complicated.
Your rollover IRA does not happen to be a ROTH where you have a lot of contribution does it? That could be one way to access the funds without tax or penalty and just do a cash deal.
Some of the CARES Act provisions *might* help also, where you can take up to 100K out and pay no penalty and spread the taxes over 3 years. Just have to run the numbers and see how far the remaining funds after taxes takes you. With a cash purchase you can leverage with 20% down and maybe make more than in the IRA even AFTER taxes.
Dan Dietz
There are some ways where you CAN do deals with a dis-qualified party, but it gets VERY complicated.
Your rollover IRA does not happen to be a ROTH where you have a lot of contribution does it? That could be one way to access the funds without tax or penalty and just do a cash deal.
Some of the CARES Act provisions *might* help also, where you can take up to 100K out and pay no penalty and spread the taxes over 3 years. Just have to run the numbers and see how far the remaining funds after taxes takes you. With a cash purchase you can leverage with 20% down and maybe make more than in the IRA even AFTER taxes.
Dan Dietz