Many people wonder whether they are allowed to utilize property managers with real estate held within an IRA. This blog addresses that very topic.
Greenville, SC (PRWEB) August 28, 2014
American IRA's latest blog addresses an important topic, "Property Management in Real Estate IRAs". Many people wonder whether they are allowed to utilize property managers with real estate held within a Self-Directed IRA. This blog addresses that very topic.
As the blog states, not only is the use of a property manager allowed, it is required with real estate owned within an IRA. For all those wondering why, the blog further explains that the IRS requires assets held within an IRA to be handled at arms length. In other words, the IRA holder is not allowed to provide any services to the assets held within their IRA. Services include but are not limited to: property management, maintenance, legals services, and more.
So, if individuals have to hire people to provide all the services to real estate held within an IRA, does it make sense to use an IRA to buy real estate? Absolutely, this blog lists many of the advantages including: leverage (must be non-recourse), tax benefits (tax-free and/or tax-deferred income), current income in form of rent, potential for price appreciation, potential sale of mineral, pasture, timber or farming rights, capital gains tax treatment on sale (only on leveraged real estate), availability of tax deferral on exchange of “like-kind” properties (only on leveraged real estate), and more.
The blog also goes on to speak about the importance of liquidity within the IRA. Making sure there are enough reserves within the IRA is extremely important since all expenses for the real estate must be paid with funds from the IRA. Additionally, the amount individuals can contribute on an annual basis is limited by the IRS which means that if a major repair is needed it may not always be possible for the IRA owner to contribute additional funds to the IRA to cover the expense of that repair.
This blog also speaks about prohibited parties and the penalties for abusing real estate IRAs.
Click here to read part 1 of this blog.
About American IRA, LLC:
Click here to claim one of our 7 Self-Directed IRA guide(s).
American IRA is committed to providing every client with gold-level service, regardless of account size. Experience their expertise through their certified IRA services professionals. Enjoy the value with one low annual fee of $285 with unlimited assets and unlimited account values. American IRA clients love the benefit of no charge for "All Cash" accounts. The performance of the American IRA staff is unmatched, with quick and efficient processing within 48 hours.
American IRA services thousands of clients and has over $300 million in assets under administration.
American IRA was built by investors for investors, and brings their successful investment experience to the table, providing excellent educational material showing the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
American IRA is conveniently located in Asheville, NC and Charlotte, NC, and serves clients nationwide.