Retire and acquire - Buzz - creating a real-estate IRA
How does it work? "It's like any other real estate investment," Anderson explains. "You open an IRA, [take money out of it], find a property you want to invest it in, and go through the closing and registration process." As with any IRA investment, you can sell at any point and incur no taxes on the gains as long as you don't withdraw the fund before age 59 1/2. What's more, you can also use your IRA funds to purchase retirement property and then take ownership of it at age 59 1/2 as a tax-free IRA distribution.
But there's also plenty you can't do. "You have to work with someone who is knowledgeable to avoid setting up a prohibitive transaction," Anderson cautions. For example, while any type of property likely to appreciate in value (such as land, rental property or a commercial building) is fair game, you cannot use IRA funds to purchase a property that you, your spouse, children or parents will live in.
How does it work? "It's like any other real estate investment," Anderson explains. "You open an IRA, [take money out of it], find a property you want to invest it in, and go through the closing and registration process." As with any IRA investment, you can sell at any point and incur no taxes on the gains as long as you don't withdraw the fund before age 59 1/2. What's more, you can also use your IRA funds to purchase retirement property and then take ownership of it at age 59 1/2 as a tax-free IRA distribution.
But there's also plenty you can't do. "You have to work with someone who is knowledgeable to avoid setting up a prohibitive transaction," Anderson cautions. For example, while any type of property likely to appreciate in value (such as land, rental property or a commercial building) is fair game, you cannot use IRA funds to purchase a property that you, your spouse, children or parents will live in.