Real Estate IRAs
Your IRA can be invested in grounded assets.
Real Estate IRAs
Many investors understand real estate. They understand how money is made in real estate. And they want to leverage that knowledge with a self-directed IRA that invests in real estate.
A GoldStar Self-Directed Real Estate IRA enables the account owner to determine how they want to do their IRA real estate investing. The investor makes the decisions, and GoldStar serves as the real estate IRA custodian, taking care of all administrative and reporting issues. A real estate IRA has the usual IRA benefits of tax-deferred or tax-free retirement income.
Common ways to invest in real estate through an IRA
A GoldStar real estate IRA can hold real estate by two methods: real property or limited liability companies and limited partnerships.
Real Property
The IRA can invest in any property attached directly to land as well as the land itself, typically a rental property or property intended for resale after a renovation. The property must be titled in the name of the IRA rather than the individual, and all expenses and income must pass through the IRA. For example, GoldStar requires a property manager for income producing properties, and the IRA owner cannot contribute “sweat equity” (do-it-yourself repairs or improvements).
Limited Liability Companies and Limited Partnerships
A real estate IRA is allowed to 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. GoldStar does not allow the use of single member LLCs, also known as “Checkbook IRAs”, to invest in real property.
Types of IRA Real Estate Investing
The IRA can invest in most common types of investment properties, including:
- Homes, apartments, rental properties, and condominiums
- Commercial properties which include retail stores, hotels, and office buildings
- Undeveloped land
- Farmland
Acquiring real estate
The investor determines which property to purchase. However, the offering documents must be titled to the IRA as GoldStar Trust Co. FBO (IRA Owner Name), IRA. Earnest money must be paid from the IRA. Using personal funds to pay the earnest money will cause the IRA to become disqualified.
Need more information?
Unrelated Business Income Tax (UBIT)
If you have any questions, or to open your GoldStar Self-Directed Real Estate IRA, contact us (1-800-486-6888) today.
GoldStar Trust Company serves as a real estate IRA custodian. GoldStar 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.
Ready to Start Investing?
Download our Real Estate IRA Investment Kit that includes all of the forms you will need, brief instructions on how to get started and a checklist for new accounts.
