Undeveloped Real Estate in an IRA with Multiple Owners
I have a situtation where a father with two sons, each having there own IRA’s, would like to purchase an undeveloped parcel of land with their IRA’s.
Can this be done as an undivided interest, or is this a prohibited transaction because they may be disqualified persons?
Thanks!
Alan McKnight
Permalink Submitted by Alan Spross on Fri, 2008-06-20 19:48
There may be a risk of disqualification here since each party is a disqualified person with respect to the other. Following is copied from an article on prohibited transactions:
• Does any party other than the IRA
stand to benefit from the transaction?
If the seller of the property is
not a disqualified person, but a disqualified
person owns the property
surrounding the real estate in question,
that disqualified person is
likely to benefit from the transaction,
making it probable that the Department
of Labor will determine it
is a case of self-dealing in the event it
is caught in an IRS audit.
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