Most people interested in growing tax-free assets put IRA fundsinto a “self directed” IRA. However, this doesn’t work for everyone. Property prices are on the rise so some people are wondering how to invest IRA funds into property purchasesto help lower or get rid of taxes and gain a return on their investment. There are a few factors toconsider, one of which is the eligibility of properties. People who purchaseproperty need to be sure to buy business property and avoid personal property purchases. Additionally, the IRA funds can only beused to purchase new property not property already owned. People should haveenough funding in their IRAs to buy long term rental properties, because a conventional mortgage is not available. Folks should also reflect on IRAinvestment issues. It is important to note that failure to comply with IRArules can mean tax penalties. Furthermore, administering the IRA costs money. Considerdiversifying your portfolio and speaking with a financial advisor for more information.
See Zillow, How to Use Your IRA to Buy Investment Properties, Forbes, Jun. 6, 2013.
