roth ira distribution
I wish for my roth ira to purchase a home in full (no mortgage).
I will not live it it, but rather either leave it vacant, or rent it out unitl I reach the age and time for a qualified distribution (in my case Feb 2010).
1. At that time can I transfer the title of the property to me and treat it as a qualified distribution without penalty or tax ?
2. can my roth ira pay for repairs or improvements ?
2. Should I get a legal opinion either from a tax attorney or from the IRS ?
Thank You.
Permalink Submitted by Alan Spross on Tue, 2008-06-10 22:29
This is possible only if you can successfully navigate all the various pitfalls. The first is to find a self directed IRA custodian who can perform all the myriad requirements to avoid a prohibited transaction.
Once the IRA has title, the IRA MUST provide all the work and expenses necessary to support the property. Neither you or any disqualified person can perform these duties.
The DOL actually provides rulings and passes them back to you via the IRS if you and your self directed custodian deem it advisable. Here is a link that covers many of the issues you will face including the issue of annual valuations.
Finally, have you considered the possibility of the real estate market bottoming out in about 20 months, just about the time your distributions would be qualified if you left your Roth as is?
http://www.aba.com/NR/rdonlyres/D8BE9599-E5ED-4994-91CB-BF8B23A2AE7C/429…
Permalink Submitted by Frank on Fri, 2008-06-13 20:02
Thank you for the information. I will consider your thoughts about the real estate market.