Partnering with an IRA to purchase Real Estate as TIC
I am looking to partner with my IRA (75%/25% respectively) to purchase real property to flip using a custodian such as PENSCO. I am getting conflicting responses from various sources. Is what I am trying to do permissible by the IRS?
Permalink Submitted by mk foss on Sat, 2011-01-15 02:01
This type of investment is permissable but it would be very difficult to carry out without problems.
You’re considered a disqualified person in connection with the IRA. If you’re managing the property for the IRA (seems logical as a 75% owner) that would be a prohibited transaction. If you paid property taxes for the whole parcel and the IRA reimbursed it’s 25% – that would be a prohibited transaction. If you didn’t ask for reimbursement, you’d be paying expenses for the IRA – that would be a prohibited transaction.
Maybe one of your “conflicting” sources knows of a way to make this happen, but I can’t see it working without incurring penalties and/or disqualifying the IRA.