Real Estate in a Roth IRA.

[Guest pe6232000]

Hello,

I understand that any Real Estate that my Roth IRA purchases can not be in my name or any family members.

But what if I sell a property to a 3rd party and then instruct my Roth IRA to purchase it from that third party, is this OK?

Are there any regulations that say how much you have to pay for the property? I mean, if the property is worth $500K and my Roth buys it for say $50K is that OK?

Does the property need to be out of my name for a specific period of time or just until is recorded in an other persons name?

How long does your Roth have to own the property? Can you instruct your Roth to sell the property one week after the transaction is complete? Can the prpperty be fliped in escrow?

Thank you,

[QDROphile]

Sounds like you are trying to be too clever by half.

[John G]

Two methods of real estate investing that you can do in a Roth is REIT stocks and real estate based mutual funds.

There are some very limited circumstances when other kinds of real estate investments can be made but here is a quick list of the negatives: (1) you can "contaminate" your IRA and it can lose its tax shelter status, (2) higher custodial fees, (3) the difficulties of how to pay for the inevitable surprise expenses that come up {using IRA funds}, (4) loss of virtually all of the tax benefits of owning real estate, (5) higher demands on your time, and (6) most accountants and tax pros have little experience in this area and can make costly mistakes.

Most of what gets posted at this site about real estate seems to be vague schemes that just won't work. If you do not have significant IRA assets, forget about real estate. Even if your assets are huge, why bother with real estate inside a tax shelter? There are plenty of great investments that are liquid and will give you reasonable results.