Real Estate in a self-directed IRA
Against our advice, one of our clients bought a piece of undeveloped, commercial real estate in a self-directed IRA a few years ago. This IRA is not with us.
Developing it did not work out, and he wants to sell it.
What complications are there for him? Is he OK if he sells it, and just has the proceeds go into the IRA?
Permalink Submitted by Alan - IRA critic on Thu, 2021-07-08 20:30
If the IRA sells the RE, the proceeds go back into the IRA. Hopefully, he has been working closely with the SD IRA Custodian throughout for guidance in avoiding devastating prohibited transactions. For a simple example, any real estate taxes on the parcel must have been paid directly from cash in the IRA. Once sold, and he no longer needs the SD IRA account, he should transfer the IRA to a mainstream IRA custodian.