Tax Issue?
Hi,
I am in the process of buying a yet to be constructed home(construction completed in November) and planned to fund the down payment with a self directed IRA.
My adminstrator asked who was getting the loan, me or the IRA. I responded me. I then found out that I can only allocate a percentage of the profit to the IRA under this scenario, which means the greater portion of the profit is not sheltered.
Once I buy, I will be selling, so hold time will likely be less than 30 days.
Will the profit be treated as ordinary income since it's a short term gain? Is it possible to do a 1031 exchange?
Please let me know what my options are.
Thanks,
Alexdad 
Your IRA can lend on an unsecured note to your business (possibly you directly). The interest on this note can shelter the profit from the property back to your IRA.
I think this would be an effective way to take out IRA money for a down payment to your lender.
Just a thought that came to mind. GOOD LUCK[ Edited by myfrogger on Date 03/11/2004 ]