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Author: RiskTakerNana Two stars, 250 posts Old School Fool SC1 Red Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76078  
Subject: buying a house with IRA money Date: 6/11/2010 1:11 AM
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Is it possible to buy a condo with monies from my IRA and have it still classified as an IRA? Perhaps there are other posts on this question. If so what numbers are the posts?
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67208 of 76078
Subject: Re: buying a house with IRA money Date: 6/11/2010 1:21 AM
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RiskTakerNana asks,

Is it possible to buy a condo with monies from my IRA and have it still classified as an IRA? Perhaps there are other posts on this question. If so what numbers are the posts?

Yes, but only if the condo is an investment and not your personal residence or a vacation home you use a few weeks a year.

intercst

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Author: BruceCM Big red star, 1000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67209 of 76078
Subject: Re: buying a house with IRA money Date: 6/11/2010 1:23 AM
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Probably not.
It is possible to buy investment real estate within your IRA, but the rules are strict, and the risk of running afoul of prohibited transaction rules and self dealing, are high.

http://www.fairmark.com/rothira/real-prohibited.htm

BruceM

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67210 of 76078
Subject: Re: buying a house with IRA money Date: 6/11/2010 7:37 AM
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Is it possible to buy a condo with monies from my IRA and have it still classified as an IRA? Perhaps there are other posts on this question. If so what numbers are the posts?

Yes, but only if the condo is an investment and not your personal residence or a vacation home you use a few weeks a year.

In addition, all income (rental, etc.) from the investment property must be deposited into the IRA and all expenses (property taxes, repairs, improvements, HOA fees, insurance deductibles, etc.) for the investment property must be paid by the IRA.

If you are subject to RMDs, you would also need to ensure that your IRAs have enough cash to pay you your RMDs in addition to paying any expenses for the investment.

Here's an article you might be interested in: http://www.kiplinger.com/magazine/archives/2005/03/IRA.html?...

AJ

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67211 of 76078
Subject: Re: buying a house with IRA money Date: 6/11/2010 12:08 PM
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Owning real estate within an IRA is essentially creating a personal REIT that consists of just one property.

This adds lots of expenses and potential problems that a normal REIT would not have and you lose diversification.

It would probably accomplish just about the same thing buy buying a carefully selected REIT within the IRA.

Greg

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Author: BruceCM Big red star, 1000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 67213 of 76078
Subject: Re: buying a house with IRA money Date: 6/11/2010 3:26 PM
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If you are subject to RMDs, you would also need to ensure that your IRAs have enough cash to pay you your RMDs in addition to paying any expenses for the investment

I wonder if come RMD time, if the IRA doesn't have the cash, if the IRS would accept taking out the interior doors and removing a couple of applicances as meeting the RMD for the year?

:-)

BruceM

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