Roth IRA and Real Estate

[TreeOfGreen.net]

I was told that, in planning for retirement, I could open a Roth IRA and use that money to invest in real estate.

Has anyone heard this, or better yet, Does anyone have experience in using a Roth IRA to invest in real estate?

Thanks for your time.

[sweeps]

Yes, you can do it, but most people don't because you already get tax advantages by owning real estate. When you put real estate investments in an IRA you give up many of those tax advantages. Also you'll have to find an IRA custodian who will allow you to do this; many won't.

[poundwise]

Google: "Self-directed IRA" (or click here)

It seems to me, in the very limited time I've read about doing this, that it is better suited for people with a substantial amount of money in their IRA.

More intriguing to me than the idea of investing in real estate through the IRA is the idea of investing a small business; like your own.

[sweeps]

Watch out for self-dealing.

[cptacek]

If you could do this and not have to pay self employment OR income taxes on the income of the business, WOW, that would be huge. But I bet that what sweeps says about the self-dealing would bite too many unsuspecting business owners.

[poundwise]

It certainly offers some substantial positives, its just also filled with potential pitfalls. You have to really understand what you are doing each step of the way. I think this will keep most people away, including me. Nonetheless, it is intriguing.