Using IRA Money to build new homes

[Chip Chronister]

Has anyone uses IRA money for a new build then sell it off on owner financing?

Thanks

[Brian Eastman]

@Chip Chronister

Development of real property for resale is a trade or business. It would be allowable for an IRA to engage in such an activity so long as everything is done at arm's length.

As a trade or business, however, income from the activity could be subject to tax on Unrelated Business Taxable Income. The trust tax rates that apply to a tax exempt entity such as an IRA can reach 37%. Check with qualified counsel prior to engaging in such an activity with IRA funds.