Aldeer.com Forums Alabama Deer Talk Aldeer General Forum 1031 Exchanges

I’m not sure if this falls into that category or not, but is there something that allows you to pull money from investment accounts and put that towards purchase of land or real estate? Without penalties, fees or etc?

Get up with Kirk Neal at Cedar Fork Land Co. He’s pretty sharp on the 1031 stuff

The 1031 exchange is not for this in my experience. There is a way to buy investment property in an IRA but it’s complicated from what I understand. I hear people talk about borrowing against an IRA, but I don’t personally like the idea. I’m interested to hear others experiences on this topic.

A 1031 Exchange is designed to allow the seller of real estate to forego capital gains taxes on the sale if they purchase other real estate within a defined amount of time. A qualified third party holds the funds and you must identify a new property within 45 days of sale of your property and close within 180 days on the new property. You can pull money out of an IRA to purchase property but there are severe limitations on the type of property along with use and ability to generate income. I also believe you are required to sell the property at some point and it can't be to yourself or a family member. This one can get tricky and most financial institutions don't handle these types of transactions. In both case, consult a professional.

We looked at a 1031 to avoid capitol gains. It was going to cost 2/3 of the tax savings and greatly complicate things ( deadlines etc). We decided to just write the check to Uncle Sam and move on.

Self directed IRA. You have to use a company to manage it. I used IRA innovation in Birmingham to purchase land.

Since y’all sent me down a rabbit hole, what are the drawbacks?
Using my 401k to purchase land without penalty seems like a logical idea that Uncle Sam would never allow.

Are we confusing IRS rule ? I thought 1031 exchanges were just that , a property for property swap. Not a purchase , no?
We did one once, it was a property for property swap. The accountant handled it, I don't know the number for sure but I thought it was 1031 .

I own a rental property in a self directed solo 401k. You pay an administrator to manage documents and compliance. it cost me $300 a year.

Titan Bank will open up a trust checking account for funds. Have the trust open an LLC with a business checking account. Fund it and have the LLC buy property.

There are strict rules such as you cannot pay yourself to manage it nor self perform any work. You have to hire and pay somebody to do repairs and maintenance and keep all records. You and your family cannot use the property. If over $250k in assets, you file a 5500 tax return.

Your 401k can buy a small business as long as you hire someone to run it.

Very interesting…

You are probably right. It may only be property for property, so long as the new property is increased in “value”. I assumed it, or something similar, is out there for turning investment accounts into property, but I have no knowledge of it

I checked on it about buying land you cant hunt it. Stopped my inquiry right then

It depend on how you structure the land purchase

I recall reading the same thing. Though I do wonder how the IRS would know.

Wonder if you could lease it to a hunting club and then join that club.

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