Can investment real estate be purchased within an IRA and, if so, are there any pitfalls?

By Denise Appleby AAA
A:

Investment real estate can be purchased with an IRA provided the investment does not violate the prohibited transaction rules.

An individual may want to check with the IRA custodian to determine whether this is an option, as not all custodians allow for such investments. Further, custodians that allow real estate investments in IRAs may require that the investment meet stringent requirements.

Regarding the matter of pitfalls, in addition to ensuring the investment does not violate application regulations, the IRA owner should be aware of investments risks. The IRA owner may want to consult with his or her investment professional and/or financial planner for assistance in determining whether such investments suit his or her financial profile.

The IRA owner may also want to consider consulting with a tax attorney to determine whether he or she is eligible to invest the IRA in a particular real estate investment.

For more information about prohibited IRA transactions, read Consequences Suffered by Non-Conforming IRAs.To learn about investing in real estate, check out Diversification Beyond Equities and The REIT Way.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Why should you invest in tangible assets?

    Read about some of the possible benefits of investing in tangible assets, such as bullion, real estate, art, collectibles ...
  2. How much of the asset management industry has moved from traditional managers to ...

    Learn about the growth of the hedge fund and alternative asset management industry and the change in regulations, preferences ...
  3. Places where I can open an IRA Account?

    Open an IRA through brokerage firms, mutual funds, banks and other major financial institutions, or through large Internet ...
  4. What role did securitization play in the U.S. subprime mortgage crisis?

    Learn how the securitization of sub-prime mortgages into asset-backed securities fueled the real estate market crash in 2 ...
RELATED TERMS
  1. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  2. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  3. Gentrification

    Gentrification refers to when a neighborhood or city undergoes ...
  4. Home (legal definition)

    A home is the place where a person has their permanent primary ...
  5. Real Estate

    Land plus anything on it, including buildings and natural resources.
  6. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...

You May Also Like

Related Articles
  1. Forex Education

    Countries Where Bitcoin Is Legal & Illegal

  2. Stock Analysis

    Fight Volatility and Inflation with ...

  3. Investing

    The 10 Biggest REITs in the U.S.: Dos ...

  4. Retirement

    Top 10 Stocks for Retirement Portfolios

  5. Savings

    How to Invest in Liquor (and Avoiding ...

Trading Center