Self-Directed IRA For Raw Land
I’m about to transfer my IRA account to a SDIRA with Equity Trust. I was originally going to use it to flip vacant lots until another thought hit me. I spotted an undeveloped parcel 10 miles from the nearest town. It’s 32 acres and is listed for $28,000 which is about market value..about
1/3 is wetland due to a creek. I can probably get it for $25,000. I expect modest appreciation for the next 5 years and then possibly a tidy profit because it has 500 feet of frontage on a highway and is a “corner lot” with a state road intersecting it. I can probably make more profit flipping
lots, but for once I’d like to have some acreage to enjoy. My question is, how strict is the IRS when it comes to “personal use” of real estate in a self directed IRA? If you have SFR dwellings, apartments or commercial buildings in your IRA, you will occasionally inspect them, correct?
That should be permissible. There seems to be some gray area here. Hunting and camping might not be allowable, but target practice and rowdy bonfires to deter potential squatters would be within one’s rights maybe?
From what I have read and heard the IRS is very "strict" on personal use (aka "prohibited transaction"
within your SDIRA. Did you talk to Desich or another Attorney? The CSRs at ETC are nice, but I'd get the legal opinon... Keep us posted, it's a great question/point.
Tim
Depends on the use and whether you are profitting from it I would think. If you have some acreage and go once a year to check it out that is not use I would think.
Are you planning to put some building on it for personal use or something?