sales of rental house held in my S.D. IRA
i have a rental house i just sold in Atlanta; i live in Arizona. i had to pay state taxes on the house by filling out an Affidavit of Seller’s Gain form. is this true? i thought the gains were not taxable until i do a distribution. do you have any recommended real estate tax people who are knowledgeable with Self Directed IRA accounts??
i’m in the process of selling 3 other rental homes in Atlanta. i am 73 years old and have had these rental houses since 2012.
Thanks for your question. If you owned the property in your self-directed IRA then you should not have had any taxes due on the sale of your property – provided that the sales proceeds stayed within your IRA and the deed to the property was previously held in the name of your IRA. This may have been something that should have been cleared up by filing a different form, but your title agency or attorney who handled the closing should know how to resolve the issue.
We have a new article coming out soon with a list of our best self-directed IRA companies, but in the meantime, you can refer to the list provided in our article on Self-Directed IRAs for Real Estate Investing.
Given your age, another thing to keep in mind is that self-directed IRAs are still subject to required minimum distribution rules for other IRAs, so perhaps you could use the sale of this property to satisfy your RMD for the year.
Hope this helps. Best of luck with your rental portfolio.