All Forum Posts by: Travis Christman

Thank you all for your input. I'll be reaching out for legal help on this, to see what my options are. I read about Self Directed IRA's and real estate. Most of the forums say to avoid it.

And that is why we have this forum. 

I do not feel comfortable saying who the custodian is, However; it is one of the self directed brokers in this space. And if they were easy to work with I would not be asking my questions on the internet.

How things were handled previously with the deceased owner of the IRA is how it was handled.

From what I see in the system. The custodian allows rent payment from their system. There is a pull down for rent deposit, when you submit deposits.

It appears that I might be in breach, since I had no idea how this instrument worked until now. Uncertain if I can update to have rent sent to the IRA, and if they will accept the rent money. Since my main question was answered that I should have rent money go into the beneficiary IRA, since rent money is not considered a contribution. I'll see if I can go in that direction.

Worse case scenario convert IRA in-kind-distribution-and pay the taxes/penalties on the conversion.

Dmitriy,

Travis, few other details will help clarify your situation:

1) When did you inherit the IRA?

It transitioned over to me in March

2) How the rent checks were handled prior to you inheriting the IRA? 

They went directly to the deceased, who then made a once a year rent deposit to the IRA at the end of the year.

3) Is there a property manager in place? Yes due to city landlord laws.

Dmitriy, thank you for responding. So Rent money is not considered a contribution for a real estate IRA?

I do have a custodian of the IRA that I can send the rent to.

As for the in-kind distribution, I don’t think I’m ready for the in-kind distribution yet, but I do like the option.

Hello,

I'm brand new here, and I have a question that I can't seem to find the answer for due to its unique situation. 

I'm now the owner of a Beneficiary Self-Directed Realestate IRA. The IRA contains one rental property and cash.

Per IRS rules I am not allowed to put money into the beneficiary IRA. I do receive rent money for the property via check, into a separate checking account not tied to the IRA. My question is what do I do with the rent money? Do I still place it back in the beneficiary IRA(which I don't think I can do)? Do I place it in a new IRA? Pocket it?

:  Inherited from someone other than spouse.

If you inherit a traditional IRA from anyone other than your deceased spouse, you can't treat the inherited IRA as your own. This means that you can't make any contributions to the IRA.

Since it is a beneficiary IRA, I will have to take out a minimum distribution per IRA rules as a non spousal IRA beneficiary by the end of the year 2018. Eventually the distributions will exhaust the cash, then it gets even more complicated, especially if I'm unable to put rental income back into the IRA.