Blog Post

Self Directed IRA and Investment Property

Blair Hart • Jan 23, 2017

More people are purchasing investment real estate in a self-directed IRA.  The Albuquerque Metro economy, like the national economy, is improving as are retirement contributions.  Rentals still remain a good way to diversity a retirement portfolio.  It you are thinking of taking a distribution from an IRA and rolling it over into a self directed IRA  to finance an investment property be careful of the rollover deadlines.   According to Jim Hamill’s article in   On the Money , January 23, 2017. “Taxpayers who receive distributions from qualified retirement plans, or  IRAs, can avoid paying taxes by rolling the distribution into a new plan or IRA. It is not possible to use this strategy to avoid tax on required minimum distributions.

A qualified rollover must be completed within 60 days of the distribution. It is best to use a direct rollover, where the funds transfer from one trustee to another. This ensures the 60-day period is satisfied.

For various reasons, people often receive a distribution themselves and then accept the responsibility to roll the funds within the 60 days. This sometimes doesn’t go well.

Distributions from qualified plans, 403(b) plans and 457(b) plans that are eligible for rollover, require the administrator to notify the participant 30 to 90 days before the distribution of the ability to do a direct rollover.”

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