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If you are interested in buying a condo, residential property, rental property, vacant lots, raw land or commercial buildings, you may do so directly from within your Trust Administration Services IRA or business retirement account. Title to the property would be held in the name of your IRA account (FDIC as Receiver for First Regional Bank c/f Client Name) with the Trust tax identification number.
Any income or expenses related to the property must flow through the real estate IRA account. Income or capital gains from the property is tax-deferred since it is in a retirement account.
The property can be sold at any time to an unrelated party and the proceeds of the sale would be returned to the IRA. You can then invest these proceeds in another property or any other asset(s) allowed.
Partial interest in a property can also be purchased. For example, if the property is selling for $200,000 and your real estate IRA invests $50,000 toward the purchase, then your real estate IRA owns a 25% undivided interest in the property which must be reflected on the deed. The remaining 75% of the property can be purchased through another IRA retirement account or other individuals.
In addition, through your TRUST Real Estate IRA, property can be purchased through a limited partnership or limited liability company that buys the real estate directly. In such cases your retirement account would own a portion of the LP or LLC.
You or a related party cannot:
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Enter into a transaction to buy or sell real estate to |
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or from yourself. |
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Pay related expenses with other personal funds then |
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be reimbursed by your retirement account. |
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Live in or vacation at any retirement account owned |
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property. |
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Write-off depreciation or other property expenses |
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from the retirement account. |
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Earn a commission or fee on any transactions |
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involving your retirement account. |
Note that it is often difficult to find a lender that will lend to a IRA retirement account. In addition, the lender cannot lend to you on behalf of your real estate IRA.
Contact our Customer Service Department for assistance in completing your real estate IRA transaction.
Prohibited Transactions.
*A related party is considered to be your spouse, lineal descendants or siblings.
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