Posted by William L. Exeter on November 19, 1998 at 13:15:42:
See the comments above.
Self-directed IRA investing question - Posted by John(NH)
Posted by John(NH) on November 18, 1998 at 17:18:24:
Hypothetical situation:
Let’s say I buy a MH and fix it up for a total of
$5000 invested. I sell with owner financing and
create a note for $10000. Can my self-directed IRA
buy the $10000 note? This would in effect give me my
capital back plus another $5000 while still leaving my
IRA balance untouched, just that $10000 in cash has
been replaced with a $10000 interest-paying note.
This sure would be sweet if true. Anyone?
-John
Self-dealing & Prohibited Transaction - Posted by William L. Exeter
Posted by William L. Exeter on November 19, 1998 at 13:11:16:
This transaction would be classified as a self-dealing transaction and therefore would be a prohibited transaction. Your IRA could buy the MH and then carry back the paper once sold, but the entire transaction and all related aspects would have to be done thru the IRA. Any personal involvement would be considered self-dealing.
Bill Exeter.
Security Trust Company.
Re: Self-directed IRA investing question - Posted by Bud Branstetter
Posted by Bud Branstetter on November 18, 1998 at 21:21:45:
You can not buy or sell to yourself or a blood relative. The person you buy the note from needs to be at an arms lenght transaction.
Re: Self-directed IRA investing question - Posted by Hugh Bromma
Posted by Hugh Bromma on November 20, 1998 at 20:19:55:
You may not perform transactions with ascendants or descendants, but syblings are OK, if you feel comfortable with that. Bill Exeter’s approach, which most people do is the carryback route.
Re: Self-directed IRA investing question - Posted by John(NH)
Posted by John(NH) on November 18, 1998 at 22:28:17:
How far is ‘arms length’? What if a friend buys the MH
for 5k, creates a note for 10k, and my IRA buys the
note from them? What if I loaned that friend the 5k?
Hmmmm… just thinking here.
Another thought - Posted by William L. Exeter
Posted by William L. Exeter on November 19, 1998 at 13:14:32:
Just have your IRA buy the MH and carry back the note.
Re: Self-directed IRA investing question - Posted by Darren (MA)
Posted by Darren (MA) on November 19, 1998 at 11:30:39:
John,
I don’t know the answer to your question but I’d like to throw something else into your mix. Could you buy the MH as a Corporation of which you only control, and then have the Corporation sell it to your IRA? I’m not sure if you can do this, but just thought I’d throw it out there.
Darren