INHERITED IRAS AND REAL

ESTATE IN IRAS: TODAY'S SLOTT

REPORT MAILBAG
Thursday, June 08, 2023
By Sarah Brenner, JD
Director of Retirement Education
Follow Us on Twitter: @theslottreport

Question:

I inherited an IRA from my brother back in 2019. I have been taking required
distributions from it each year. Can I do a qualified charitable distribution from this
inherited IRA this year to satisfy the required distribution requirements from this IRA?

Answer:

It is possible for a beneficiary to do a qualified charitable distribution (QCD) from an

inherited IRA. You must be age 70 ½ and the maximum amount that can be taken for
2023 is $100,000. A QCD can satisfy a required minimum distribution from an inherited
IRA.

Question:

I have a client who is interested in having his IRA purchase a vacation home. Can this
be done?

Answer:

An IRA can invest in real estate. It is an allowable investment. However, your client
should be aware that that there are prohibited transaction concerns with using his IRA
to invest in a vacation property. The prohibited transaction rules do not allow you to
personally benefit from investments in your IRA. That would mean that your client (or
his family) could never use his vacation home. He also could not do any work on the
home, such as repair work, without violating the rules.

Investing an IRA in alternative investment such as real estate, while allowed, comes
with additional risks and complications. Your client should understand these factors
before deciding to move forward.