Buying with a retirement account

The IRS has allowed real estate inside an IRA since 1974. Most brokerages don't offer it because they don't hold real property, which is different from it being prohibited. And with a 2026 contribution limit of $7,500, this is a strategy for capital you already have, usually an old 401(k).

A self-directed IRA is an ordinary IRA at a custodian who will hold real property. The account owns it, titled in its name, and rent and expenses run through it. Traditional or Roth matters more here than almost anywhere else, because a Roth turns rent and appreciation into tax-free retirement income.

Lineage is not a tax advisor. Talk to your CPA about your own situation.

You can't live in it, work on it, or rent it to your spouse, your parents, or your children. Siblings, cousins, and friends are not on that list, which surprises people every time. Break one rule and the IRS can treat the whole account as distributed on January 1 of that year, with a 10% penalty under 59½.

An IRA purchase doesn't have to be all cash. A non-recourse loan is secured by the property and nothing else, so the lender can't reach you or the rest of the account. Expect a bigger down payment, a higher rate, and fewer lenders. Borrowing also creates a tax the account wouldn't otherwise owe, called UDFI, and Ron runs that comparison on screen.

Illustrative example. Actual returns vary. Lineage is not a tax advisor. Talk to your CPA about your own situation.

Ron asks four questions. Where your capital sits, when you want the income, Traditional or Roth, and what the deductions on your personal return are worth. For a lot of people the answer will be to buy in their own name instead. The step that sets the timeline is funding the custodian, because a rollover takes days to weeks.

Then we open it up and answer your questions live.