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Using Parents Self-Directed IRA for RE funds
My parents have some money in their IRA they would like to use to invest in some RE deals I've been working on. We would create an LLC and share ownership. I mentioned this to a colleague and they seemed to think this could fall under some restrictive rules (ie Parents can't invest in their children with self-directed IRA). Was he right? Does anyone have any insight on this? I've tried to do some research online but came up with nothing. Thanks in Advance!
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#1 New Member Introductions Contributor
- Solo 401k Expert
- Anaheim Hills, CA
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#1 New Member Introductions Contributor
- Solo 401k Expert
- Anaheim Hills, CA
Your parents can setup a self-directed IRA and invest in real estate. However, you are considered to be a "Disqualified Person" to either of your parent's IRA. IRS rules prohibit any transaction between an IRA and disqualified person. While in some cases it is possible to pull the funds together with disqualified person most of the times such transaction would be prohibited.