I'm over 59 1/2, I want to buy a home with Traditional IRA funds since I'm elibible not to take the 10% penalty but would take such a tax hit now since I'm still working. I know I can't live in this house if I do self-directed Ira but someday I would like to live there. Can I someday have the LLC sell the property to me? Basically my question is if I buy using self directed Ira can I ever since there?
Buying a home you wish to live in in the future with your IRA likely does not make sense.
The only way you can use that home personally is to take the home out of the IRA as a distribution in-kind at the present value when you take the distribution.
So, if the IRA purchases a home as an investment today for $100K, and 5 years down the line that home is worth $125K, then when you take a distribution, you are taking out $125K all at once and will get hammered on taxes. You have not sheltered the gain in value of the property and will still be in a high tax bracket due to the size of the distribution.