Combining IRA funds with non-IRA funds to purchase single RE property
I know an IRA can be used to purchase real estate, but can I combine IRA funds with non-IRA funds to buy a single real estate property? I.e. I would see it as a partnership from a tax perspective, with IRA owning a portion, and myself owning the rest. Would be for an investment property, not personal use.
Permalink Submitted by Alan - IRA critic on Fri, 2023-03-10 03:29
You could do this, but would have to be careful to avoid any prohibited transactions such as any personal use, renting at a discount to a relative, etc. You could not depreciate the share your IRA owns, and would have to pay the proportionate share of repairs, insurance, prop taxes, legal, etc from your IRA. In effect you would have to treat these as two separate owners and do the appropriate accounting. Obviously, your IRA would have to hold other assets to have the liquidity to pay these costs, and you would need a special self directed IRA custodian for the IRA. In other words, this would create somewhat of a hassle.
Permalink Submitted by Dan Cahill on Fri, 2023-03-10 04:06
it sounds like more hassle than may be worth, but if the right RE deal comes along that could only happen w/use of the IRA funds, it’s good to know it’s an option. thank you!
Permalink Submitted by Bruce Steiner on Sat, 2023-04-08 20:52
Permalink Submitted by Dan Cahill on Fri, 2023-03-10 05:21
would this make for a complicated exit as well if i decided to sell the property in the future?