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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120789  
Subject: Re: House in Roth? Date: 10/6/2003 4:36 PM
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clawdebtcoldbeer: "Maybe this is a dumb idea, but . . .

I recently purchased a condo, and have very little equity (less than $10,000 on a $265,000 property -- no I don't pay PMI, don't ask).

My question: If I converted my ownership in the condo to shares (via a realty trust or something) and contributed my equity to a Roth up to the max every year, could I put the entire property (at its current very low value) in the Roth and not pay CG tax when I sell the condo?

I'm sure this is a very bad idea, just not sure why. There are probably state recording requirements also, but I haven't looked into them."


First, you would need to find a trustee that is willing to own real estate for you.

Second, there is no personal use permitted of IRA owned real estate, and the IRA cannot be a debtor on a mortgage and the IRA must pay operating expenses.

Third, all you can contribute to an IRA is cash. The IRA could purchase an interest (ASSUMING THAT YOU DID NOT RUN AFOUL OF RELATED PARTY RULES), but it would have to be at FMV not at some arbitarily low rate.

I believe that this will never fly.

Regards, JAFO


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