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Updated 9 months ago on . Most recent reply presented by

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Marijuana (MP) Vandyck
  • Investor
  • Florida
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Can anyone confirm is capital gains taxes will be waived in SDIRA Property Divorce?

Marijuana (MP) Vandyck
  • Investor
  • Florida
Posted

A spouse  wants $50,000 of the $140,000 value of a real estate property being held in their spouse's SDIRA in Florida- an equitable split property state when it comes to divorce. The spouse who owns the SDIRA will NOT sell the property outright as there is no mortgage and it appreciates yearly. 

All six (6) lenders the owning spouse has contacted have stated that due to the way the property is titled in the SDIRA (75% SDIRA owned and 25% ownership in spouse personal name), the SDIRA would have to disburse the property totally from the SDIRA and deed the property into only the owning spouses name in order to provide a mortgage loan, HELOC, etc of any kind against the property in order to pay the spouse. Their SDIRA company has agreed to do this... so long as the divorce decree spells out this requirement explicitly. There is no other way the owning spouse can raise $50,000 without dispursing this property. With that.....

QST: Because this is a divorce situation, can this be done without tax implications in this case just like any other IRA transfers in a divorce situation?

Naturally they are talking with tax professionals, however most of them are not very knowledgeable about SDIRA's- hence this post to you all! :-)

Thanks in advance for your answers! 

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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
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Dmitriy Fomichenko
#1 New Member Introductions Contributor
  • Solo 401k Expert
  • Anaheim Hills, CA
Replied

This is advice for the readers: DO NOT buy real estate jointly with your IRA. This is just one example of many things that could go wrong when a "disqualified person" is involved in the transaction with the IRA. In the worst-case scenario, your entire IRA can be considered distributed.

The property can still be financed; you need a non-recourse loan. Using a private lender would probably be the best and easiest option in this scenario. 

  • Dmitriy Fomichenko
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