Friday, October 20, 2017
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Real Estate IRAs

REAL ESTATE IRAs

Holding real estate within an IRA is becoming more and more prevalent as the popularity of self-directed IRAs has increased. Investors gain control over investment choices in addition to growing their retirement through tax-deferred or tax-free retirement income. Common ways to invest in real estate through an IRA are:

1. Real Property titled in the name of the IRA:
  • any property attached directly to land as well as the land itself
  • typically a rental property or property intended for resale after a renovation
  • requires a property manager for income producing properties
  • the IRA owner cannot contribute “sweat equity” (do-it-yourself repairs or improvements)
2. LLCs / LPs:  The IRA can own shares of an LLC or LP that owns real estate. With this structure, the LLC or LP is required to obtain approval by GoldStar Trust Company to be held as a privately offered investment. Click here for more information.

Types of Real Estate IRA Investments

Common types of investment properties held in IRAs are:

  • Homes, apartments, rental properties, and condominiums
  • Commercial properties which include retail stores, hotels, and office buildings
  • Undeveloped land
  • Farmland

Titling Rules for IRAs

When purchasing physical real estate in an IRA:

  • The property will be owned by the IRA and must be titled as such (e.g. Gold-Star Trust Co. FBO (IRA Owner Name), IRA).
  • All expenses and income must flow through the IRA account.

Steps to Acquire Real Estate

  1. Open and fund your real estate IRA - Submit your Account Application to GoldStar to open your new IRA. Your account can be funded with a transfer, rollover and/or contribution. Please allow several weeks processing time for the funding of your IRA if you are moving from another custodian or qualified plan.
  2. Make an offer on the property you have chosen to purchase - The offering documents must be titled as GoldStar Trust Co. FBO (IRA Owner Name), IRA. Earnest money must be paid from the IRA. Do not use personal funds to pay the earnest money as this will cause the IRA to become disqualified.
  3. Refer to the Real Estate Checklist to determine the required paperwork for the purchase. If you have any questions contact a GoldStar Representative. Closing documents must be received by Goldstar 3 business days prior to the closing date.

Questions? Call us at 1.800.486.6888 or email us at info@goldstartrust.com
Investor Services Hours: 7am-5pm CST M-Th., 7am-4pm Fri.

*GoldStar Trust Company does not give investment advice nor are we affiliated with any investment sponsor or retirement plan sponsor. We do not give tax or legal advice nor benefit financially from investment choices.

FDIC NOTICE: IRA and/or Bond investments represented on this website are not FDIC-insured, are not guaranteed by GoldStar Trust Company, and involve risk including possible loss of principal. If held in a GoldStar IRA or GAMMA account, the un-invested cash portion is FDIC insured up to $250,000.