Seus Land Exchange Inc.

This is a follow up post to How to Invest in Land Using a Self-Directed IRA.

We've received the question, "Can I use land held in my IRA for hunting, fishing, or recreational use?"

Answer: You are unable to use any land or property held in your IRA for personal use.

The IRS speaks of specific acts to avoid so that you don't incur any extra taxes or other costs, included loss of IRA status:

Prohibited Transactions

Generally, a prohibited transaction is any improper use of your traditional IRA account or annuity by you, your beneficiary, or any disqualified person. Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant). The following are examples of prohibited transactions with a traditional IRA:

• Borrowing money from it.
• Selling property to it.
• Receiving unreasonable compensation for managing it.
• Using it as security for a loan.
• Buying property for personal use (present or future) with IRA funds.”

Source: IRS Publication 590

You may not personally perform maintenance on that land either. You may hire someone else to perform this tasks, and pay for it with money from your IRA.

Once you retire, you are free to use the land as you please!

Labels: investing in land using IRA, IRA and real estate, Land Investment, Land investment using self-directed IRA