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Paying for Hunting land

BugleMIn

New Member
Off and On I have wanted to buy some ground for hunting. I always had funds in my 401K's and equity tied up in my home, but never enough cash sitting in the bank to buy 40 or 80 acres.

I switched jobs a few years ago and rolled one of my 401K accounts into an IRA. And now I am reading about how one can invest in real estate (ie hunting ground) through the IRA, via a real estate investment trust. There are lots of rules to follow and it must be "administered" by a financial type person, but it can be done.

Has anyone done this?
 
REIT's can be suitable investments. In Iowa you must have a minimum Net worth(excluding home, vehicles, home furnishings and autos) of $250,000 or greater/ or $70,000 minimum net worth(same guidelines as above) and an annual income greater than $70,000.

Additionally, no more than 10% of you LIQUID net worth, can be invested in a Real Estate Investment Trust.

If you want more information- PM me offline.
 
I have a parcel of land in Iowa that is 50% owned by a self directed IRA...

The NY Times did a feature on self directed IRAs and I was interviewed for it...if you have questions pm me...


Some key features;
-CRP and farm land can provide future tax deferred income
-loans can be used but must be non-recourse loans
-a custodian must manage the money
-if you want to use the land...you must have a percentage of the farm outside the IRA. The IRS restricts use within an IRA until age 59.5
-nice way to diversify your retirement income
-very few self directed iRAs exist that use farmland right now... But that will change.
 
Awesome. Thanks Guys. I will be in touch. I think the self directed was what I was thinking of. Not the REIT.

Anybody else?
 
My dad used equity trust to purchase some farmland a few years ago. I think he has been happy with them for the most part. Using your IRA to purchase farmland is a relatively new process so be ready to have a few minor headaches when dealing with the FSA office. The fact that your money is put into a custodial account and the fact the custodian is called "equity trust" for my dads ira has really made it hard for the FSA office to differentiate what he has going on compared to an actual trust. It had been a small issue for him because as you will find out their are several rules that you need to follow to insure your staying within the legal parameters of an IRA but the FSA office in Illinois is so used to doing things a certain way when it comes to crp payments, etc..... That a few headaches have come up. Like I said this is a new way of people purchasing property and eventually all these minor snags will get worked out. I think over time many more people will start using self directed IRA's to purchase property. It's an awesome tool and a great way to diversify your retirement portfolio in my opinion
 
My dad used equity trust to purchase some farmland a few years ago. I think he has been happy with them for the most part. Using your IRA to purchase farmland is a relatively new process so be ready to have a few minor headaches when dealing with the FSA office. The fact that your money is put into a custodial account and the fact the custodian is called "equity trust" for my dads ira has really made it hard for the FSA office to differentiate what he has going on compared to an actual trust. It had been a small issue for him because as you will find out their are several rules that you need to follow to insure your staying within the legal parameters of an IRA but the FSA office in Illinois is so used to doing things a certain way when it comes to crp payments, etc..... That a few headaches have come up. Like I said this is a new way of people purchasing property and eventually all these minor snags will get worked out. I think over time many more people will start using self directed IRA's to purchase property. It's an awesome tool and a great way to diversify your retirement portfolio in my opinion

There are some headaches...for instance CRP can be tricky....and if you are a farmer you cannot farm the ground yourself, it must be rented by another farmer.
 
There are some headaches...for instance CRP can be tricky....and if you are a farmer you cannot farm the ground yourself, it must be rented by another farmer.


Yes, I am learning, and other things like the money for the property taxes has to come from the trust in the IRA, so you need to have extra cash sitting in the trust for the custodian to pay with. Any income from CRP, etc has to go back in to the IRA.

Thanks, good info guys.

I am interested in the 50% of it owned by the IRA. It makes sense, and could have partners then too.
 
The way I understand it you personally can not use the IRA land for anything including hunting on it. The only way to get around it is to split between the IRA and personally owned land as I see it. If the rules are broken the IRS can make you take an early distribution.
 
Iowa farm

The way I understand it you personally can not use the IRA land for anything including hunting on it. The only way to get around it is to split between the IRA and personally owned land as I see it. If the rules are broken the IRS can make you take an early distribution.

Correct, until you are 59.5. I would never buy a farm for hunting with an IRA, unless you split the ownership.
 
I have a parcel of land in Iowa that is 50% owned by a self directed IRA...

Where can a guy get more information on this?
 
I have a parcel of land in Iowa that is 50% owned by a self directed IRA...

Where can I find more information on this?
 
Correct, until you are 59.5. I would never buy a farm for hunting with an IRA, unless you split the ownership.

Interesting...and how would the IRS know if you did anything on the land? How would they know if it is me hunting or some guy the custodian of the account said could hunt?

Hardwood11, how easy is it for the custodian to the setup the 50% ownership deal? Just a little more paperwork or is it a big deal...

Thanks
 
Interesting...and how would the IRS know if you did anything on the land? How would they know if it is me hunting or some guy the custodian of the account said could hunt?

Hardwood11, how easy is it for the custodian to the setup the 50% ownership deal? Just a little more paperwork or is it a big deal...

Thanks

The IRS would more than likely never know??
However, I wouldn't chance it...

50/50 ownership is not hard to set up
 
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