How to Title Property in Your Real Estate IRA
Real estate assets purchased with self-directed IRA funds are titled in the name of the custodian or administrator of the account.
Remember, the IRA owns the investment, not the investor.
Example 1: On a title for IRAs, HSAs, and ESAs, the name would appear on the deed as “Advanta IRA FBO John Doe IRA #12345.” In the event you have partnered funds for the acquisition, the title would read “Advanta IRA FBO John Doe IRA #12345 as to a (percentage of ownership) % undivided interest.”
Example 2: On a title for qualified plans, the name would appear as “Jane Jones, Trustee of Health Care Profit Sharing 401(k) Plan John Doe Account #12345.” The titling for partnered funds would also list the percentage of ownership.
It is important that you seek the advice of proper counsel (such as an attorney or tax professional) when you title property in your real estate IRA. The rules and regulations regarding these transactions may vary from state to state. You want to ensure you are in compliance with any tax obligations or legal requirements.
Steps to complete a real estate purchase with your IRA:
- You must provide the contract to Advanta IRA stating that the IRA is the buyer of the real estate. Advanta IRA will need you (our client) to initial and sign the contract, indicating the client’s approval of the terms.
- You would also complete a Real Estate Purchase Authorization Form, giving Advanta IRA the details of the purchase and also letting us know what company will be acting as closing agent for the transaction.
- Advanta IRA works with the closing agent to ensure all closing documents are properly titled in the name of your IRA. Once the documents are properly drafted, Advanta IRA will send them to you for your review and approval.
- You will sign and date each page of the closing documents, verifying that you have read and approved the paperwork. You then would forward all of the approved documents to us.
- Advanta IRA signs all documents for the purchase on behalf of your self-directed IRA.