Own Rental Real Estate in Your IRA
<!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} -->Have you wondered if it is possible to own rental real estate in your IRA? Let me assure you it is possible. The IRS allows real estate in an IRA, so you don't need to be concerned about breaking any rules there.
In fact, a great way to grow your portfolio is to own rental real estate in your IRA. You get the benefit of having a stable investment, while at the same time you provide housing, offices or business places for people who need them to live in or to earn their living. It is a good way to invest in a community and at the same time invest in your financial future.
There are rules you must follow if you have real estate in an IRA. One rule is you or a disqualified person cannot own the property that is in your IRA. A disqualified person would be your fiduciary or trustee, or a member of your family, such as a spouse or lineal descendant. A fiduciary for IRA purposes is someone you pay who provides you with investment advice toward your IRA, or someone who has authority to manage or dispose of your IRA.
To own rental real estate in your IRA requires you to keep the money from the rentals separate from any other income you may have. In practice this means do not deposit rent money from an IRA real estate in your household or personal account. Do not even have the checks made out to you personally, but instead the checks should be made out to the IRA.
Having checks made out to you personally or deposited into your personal account could be a prohibited action, and would cause the real estate in your IRA to revert to a non IRA asset, which would mean it would be taxed as regular rental income, not tax deferred like an IRA. Also your property expenses must be kept separate and paid out of the IRA account not your personal account.
These are fairly simple rules to adhere to and considering the tax benefits you will get when having your IRA in real estate, you don't want to let the rules deter you from moving forward and obtaining real estate in an IRA.
There are IRA custodians available to handle all the paperwork for you, so you don't have to worry about making mistakes. There are even companies that will find the real estate for you and manage the rental properties. You won't have worry about repairs and maintenance, nor will you have to concern yourself with finding tenants.
Now that you know a little bit about how to own rental real estate in your IRA, check around and find the best company to do business with and start earning profit in your IRA with rental income today. Your financial future will be glad you did.