accounting/tax question

[maravilla]

Sure they’d buy another car from that dealer because we’ve dumbed them down to the point they can’t make rational decisions anymore. A lot of people are very unhappy with the Euro! Italy wants the Lira back. The UK never signed on for the Euro. And right now in Italy, a lot of people have NO money. Once the Euro went into effect the prices for goods and services nearly doubled. The Euro was a con game. The Amero will be nothing more than monopoly money, which is what the dollar is now, backed by NOTHING! It’s fiat money! The gansters who orchestrated this financial collapse should be imprisoned or put against a wall and executed. I’m starting to hear horror stories from family friends in their 70’s who have now lost their homes, lost their 40lKs and are now trying to figure out how they are going to survive on what little they have left. You want to wake up one day in your 70’s, too old to get a job, or maybe too infirmed to work at all, and find out you are penniless, homeless, and the fat cats are still flying around on a Gulfstream V.

[union]

Yes, you can buy property through a self-directed IRA, but you can’t live in it yourself or use it as a vacation home for yourself.

If it was me I would look into what the tax consequences would be to pull the money out and maybe decide it would be worth it to put it in gold bullion instead while I look for property and rent for a year or so in CR. Bullionvault.com has a vault in Switzerland so that gets the money out of the country right away.

If you are looking for property along the coast you should be able to find better deals in a year.

If you are going to sell your home in the states, you better get on it real quick, and accept that you will get a lot less for it than you wanted. Best to list it at a price close to the lowest you will accept right away or you will have to accept a price much lower later on or not get it sold at all. I don’t think many people are getting mortgages anymore, and cash buyers are scarce. Super important now to stage your house as nice as you can, get rid of all clutter and address all problems. You will have to work it yourself and not rely on a realtor. Put ads on Craigslist with really good photos, hold your own open houses as often as you can. Where is your house? Let me know how to contact you, maybe I can help.

[tracymartin]

Thanks for that info, I do agree I should get out of my Vangaurd, even though it is one of the most conservative funds-I still think UStreasuries will be on the foreign hit list, once our $ really starts to plummet. Is it even possible to buy foreign property in a self-directed account and couldnt I just keep it “rented” how would anyone know if I were the renter?
I do have a small (70oz) position in physical gold-stashed at home, I bought at 680, I used California numismatics, I just couldnt trust putting it somewhre else.
I hate to even say this but I dont know if I could sell my house if I had to-there are 8 houses for sale now in my small neighborhood and there’s no one looking in this price range. But I agree, I think it’s going to get much worse. (great advise on the staging).

[harvcarp]

You can use your self-directed IRA to buy your future retirement home, but you can’t live in the home until you retire. You also cannot put a piece of property that you currently own into your IRA.

Yes, when you retire.

[tracymartin]

Can retirement be at any age, if I am no longer paying into SS? So, theoretically, I move my 200k monopoly dollars into a self-directed IRA and with that money and some more cash (my “income” property is more than 200k) I purchase a “rental” property and proceed to rent it out until I retire? Sorry if I’m being slow.
I seem to recall my neighbor who spoke about this mechanism said that not all investment folk did this sort of thing and it had to be a special agent who specialized in the fine points of the tax codes-his special agent is in Ft.Lauderdale-Is this your same understanding? Thanks so much

[union]

You would be taking a big risk, and I don’t know about you, but I prefer to follow the book so I can sleep at night…

Plus if you take the money out of the Vanguard, and have to pay the penalty, why not just pay for the house? Maybe I’m missing something…

Plus, again, I know you probably fell in love with a specific house down there, but if it’s at the beach they will be a lot cheaper by the time you actually move down, and renting for a while is recommended anyway. Someone I know lived in that area for a year and thought it was a pain every time they had to go to San Jose. It’s just wise to really make sure you like it before you make such a large investment.

I don’t know ‘how’ the IRS would find out if you live in the “rental” but, the consequences seem to dire for me to try:

“Using a rental property for personal use may disqualify the entire self-directed IRA. So, assume you use $100,000 from a $1 million self-directed IRA to buy a condo at the beach. Even if you use the condo just two weeks a year, the entire $1 million IRA could be disqualified. Here’s how the IRS explains it:

However, in this case, with an individual retirement account, instead of imposing an excise tax on the parties to the transaction, the Code provides that the account is no longer an individual retirement account, and it is treated as if the assets were distributed on the first day of the taxable year in which the prohibited transaction occurred. (Code §408(e)(2))

The result would be a hefty tax bill and penalties. And that’s not good for anybody. So, as I noted at the start, a self-directed IRA can be a source of capital for investing in rental property. But the rules are complex, so you should seek the advice of a tax and self-directed IRA specialist before launching full bore. “

Found this at:
http://www.twowiseacres.com/financing-rental-properties/using-a-self-directed-ira-to-invest-in-real-estate/

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