Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Can someone buy a house across the street and put it in an IRA?
Is it hard to find a custodian who would allow that?

It should be impossible. Contributions to an IRA, other than a rollover, must be in cash.

How about doing it with mineral interests?
Same thing.

Or could one create an LLC that owns minerals/real estate and
then the IRA invests in the LLC shares?

That you can do - BUT - your custodian/trustee has to agree to go along with the LLC interests, which wouldn't be a listed security, etc.

Of course there are plenty of publicly-traded limited partnerships out there that deal in real estate and oil/gas/mineral properties.

But the problem is that if it's debt-financed property, then the income from it - including any gain on sale - is Unrelated Business Taxable Income (UBTI) and subject to tax at corporate rates, even though it's inside an IRA. Which kind of kills the purpose for doing it. So you would have to do the deal with all- equity investment, to have it make sense. And then find a trustee/custodian who would go along with it.

Easier to just buy shares in a REIT or mutual fund focused on real estate. Your IRA can always do that.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.