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RULE 1
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RULE 2
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RULE 3
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RULE 4
Your IRA owns the real estate
When you buy real estate in your IRA, the IRA will be the purchaser. The way we accomplish this is to to use the following verbiage on the contract and closing documents:
"Midland Trust Company As Custodian FBO Client Name, Client Account #"
Personal use of the property is prohibited
Under no circumstances may an investor have any personal use of a property held within their IRA. Personal use includes maintenance and improvements done by the account holder. Disqualified parties to the IRA may not use the property either. These persons include the IRA owner’s spouse, lineal ascendants, and lineal descendants. Disqualified persons also include lineal ascendants’ and descendants’ spouses.
Understand prohibited transactions
The IRS is clear on guidelines for buying real estate in your IRA. Sometimes the easiest way to understand what you can do is to understand what you can't do.
Income and Expenses go through the IRA.
The IRA account must pay all related expenses. At Midland, we provide you access to a portal where you enter the expenses to pay the corresponding invoice from your IRA. The same goes for income: rent will be paid to your IRA, not to you individually. And yes, we have an app for that, too!