Self Directed Ira - Is a purchase of Travel Trailer allowed

Self Directed Ira - Is a purchase of Travel Trailer allowed

Member since 2021 · 3 posts · 0 votes

If a person already has land/lot through the Traditional SDRIRA, would the purchase of a mini travel trailer for that lot be allowed under the SDRIRA?   The intention is to rent the unit.  In my area the growth and demand for a little land and fresh mountain clean air & water is exponential.  I figure it may be worthwhile to get the monthly earnings back into the SDRIRA this way. The acquisition cost is fairly small, compared to the potential earnings.  The reason I ask is that it is technically a recreational vehicle, however its going to be rented on a lease agreement for 6-12 month basis.  Would that fall into a rental home category?  or would that even matter. 

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Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
4y
Originally posted by @John Underwood:

I would think your IRA could own the land, you buy the RV and do a split between the two when rented based on value.

Absolutely NOT! Can put personal RV on IRA owned land.

IRA could buy RV, put it on a land it owns and rent it out. But everything must be arms length, IRA owned can't do any work and must use unrelated third party for any improvements/repairs.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y

    I am interested in what the experts say on this.

    I am going to guess yes on the land, no on the RV. 

    However, I would think your IRA could own the land, you buy the RV and do a split between the two when rented based on value.

    Following to see what other opinions are.

  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    4y
    I think it would be okay as a rental. 

    You need to be hands off though- finding a property manager to manage a trailer may be a little tricky. 
  • Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    4y
    Originally posted by @John Underwood:

    I would think your IRA could own the land, you buy the RV and do a split between the two when rented based on value.

    Absolutely NOT! Can put personal RV on IRA owned land.

    IRA could buy RV, put it on a land it owns and rent it out. But everything must be arms length, IRA owned can't do any work and must use unrelated third party for any improvements/repairs.

  • Member since 2021 · 3 posts · 0 votes
    4y

    Thanks for the feedback everyone.  I spent some time on research and decided that it would be a less sticky situation to  develop the land further and rent out the lot. The resident can park their own RV on it.  Every month they would pay parking lot rent.  This may be attractive as the lake & mini grocery store is near by and we have clean fresh air. 

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