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Per email correspondence with Glen Mather: “Any distribution from your IRA is taxed at ordinary income (You wouldn’t sell it to yourself, just simply have the administrator retitle the property from your IRA to you personally). A distribution prior to age 59.5 would trigger an additional 10% tax penalty. The property must be appraised prior to taking distribution and this appraisal must accompany the selling instructions to your administrator. You could build on and use the property in the future, but you first must take a distribution”.
Glen also said that I could not sell the property to my own corporation. “There are several issues involved, one with the contribution to the IRA, and the other is a potential prohibited transaction regarding selling the property to your corporation”.
In short there appears to be no legal way to do this unless I wish to suffer a 10% penalty for early distribution!
Thanks all (and Glen).
Perhaps I was not clear. I would wish to liquidate the IRA property/asset completely PRIOR to building on it. Could I sell it at fair-market value when I am 55? And perhaps the purchaser of the property just might be my own corporation? That way I have absolutely no contact with the property whatsover while it is in my IRA portfolio. Just some ideas. Shoot it down if it is wrong please! This has to be a scenario that others have encountered before.
