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Home › Forums › Other › How do self-directed IRA’s work and how can it be used to invest in RE? › harlyd wrote:It is possible

December 3, 2012 at 1:26 PM #755696
no_such_reality
Participant

[quote=harlyd]It is possible to have to pay tax, but that is in the case where the entire property is not wholly owned by the IRA. If the IRA does not own %100 of the property it can be subject to UDFI aka (Unrelated Debt Financed Income) http://www.broadfinancial.com/udfi

There are others things I would say to be aware of and that is prohibited transactions. http://www.broadfinancial.com/prohibited-transactions%5B/quote%5D

A side effect of UDFI is you can’t use a loan or mortgage to buy the property. You have to use all cash.