It sounds too good to be true: As an IRA holder, you can use your retirement funds, prior to retirement age, to purchase commercial real estate as an investment inside your retirement account without incurring penalties or taxes. Depending on the account structure, you can even purchase these investments using a checkbook tied to your IRA funds.
Since 1974, IRA and 401(k) account holders have had the option to control the ways in which their retirement monies are invested, including real estate, tax liens and other alternative assets. Because the investment is made on behalf of the retirement account, just like the IRA investing in stocks and bonds, the acquisition is made without triggering a taxable event. (more…)