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Author: susan400 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 121563  
Subject: placing RE in an IRA Date: 4/9/2011 7:06 PM
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I know this has been covered here anyone with a good link?

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?

How about doing it with mineral interests?

Or could one create an LLC that ownes minerals/realestate and
then the IRA invests in the LLC shares?

TIA susan
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113041 of 121563
Subject: Re: placing RE in an IRA Date: 4/9/2011 10:53 PM
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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.

Bill

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Author: bookie71 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113043 of 121563
Subject: Re: placing RE in an IRA Date: 4/9/2011 11:27 PM
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here is one group that will let you do "alternative" investments. If debt is involved, it causes all kinds of problems.

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Author: katiewa Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113044 of 121563
Subject: Re: placing RE in an IRA Date: 4/10/2011 1:08 AM
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For custodians who handle non-traditional investments, I looked at Equity Trust, Pensco, Guidant, Millenium, and Entrust. I decided against Guidant because I could not reconcile managing an LLC whose only investor was my IRA with self-dealing restrictions. Equity Trust was my top choice until my contact demonstrated a lack of attention to detail. Doing a spreadsheet based on my hypothetical portfolio, Penso was more expensive than Equity Trust, but quite a bit less than Entrust. In all cases, the cost-to-portfolio value ratio was less than 1%, but you would need to create your own model to reflect what you want to do--all the custodians charge differently and for different things.

Can someone buy a house across the street and put it in an IRA? Actually, you fund your IRA and then you direct the custodian of your IRA to buy the house. I have NOT done this yet--just did the initial paperwork for the IRA on Friday, and will be working on the funding next week.

Kathleen

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Author: susan400 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113047 of 121563
Subject: Re: placing RE in an IRA Date: 4/10/2011 8:20 AM
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bookie thx re alternative investments ira

but where is teh link?

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Author: bookie71 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 113049 of 121563
Subject: Re: placing RE in an IRA Date: 4/10/2011 11:50 AM
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opps, here is the link
http://www.entrustcama.com/

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