Concerns about self dealing in a self directed ira
Unfortunately, I lost my Mom a few years. As a result, I have a beneficiary roth ira. This is a great asset because any profits are tax free and distributions are not penalized or taxed. It is currently self-directed and Quest IRA is the custodian. I have wholesaled a few homes using this IRA account and am concerned that if I do anymore this year, I could trigger some sort of self-dealing flag.
With the exception of 1 assignment last year, I've closed every deal with Quest as the custodian. They sign the contracts, documents, etc, wire the funds, and receive the wire proceeds. I don't touch any of the money - all I do is fill out forms to give permission for the transactions and sign to approve legal documents Quest is signing on my IRA's behalf. I've asked Quest whether or not I'm toeing the line on self dealing, but they won't provide much input because they don't want to get into giving legal advice. Below is a short summary of what I've done this year.
-I've done 3 transactions this year where the IRA bought a property, closed on it, and then sold it within a couple of weeks. A true wholesale.
-I've done 1 transaction where the IRA bought a property, somebody invoiced the IRA for some minor repairs (they paid via check), and sold it 3 weeks later. Close to a wholesale, but some "investment" time.
-In the 5th transaction, a property was bought, the owners are staying for 6 weeks and paying rent. When they move some minor clean-up and repairs will be done and the property will be sold. Probably about a 10 week turnaround total. An investment or close to it.
Currently my IRA only owns the one property referenced in the 5th transaction. I have another opportunity to buy a property that will require some clean up and minor repairs before being put on market. It would probably be a 6 week turnaround buy to sell. I could hold the property a little longer before putting it for sale if there is a "recommended" holding time before selling.
I admit - I do not know anything about what constitutes self dealing and what does not. It seems to me that there would be a difference between 1) the first 3 transactions (buy/sell no repairs - a true wholesale); 2) the transactions where there is a purchase/repairs/sale (closer to an investment); and 3) the transaction where there is a purchase/renting or holding period/repairs/then sale (an investment).
I was thinking I was going to do maybe 2-3 more of the buy, hold, repair, then sell transactions this year. But I do not know if that is toeing the line too much. Any advice from experts would be greatly appreciated.