Assuming the funds you will use to purchase real estate will be from either your traditional IRA or Roth IRA, the tax consequence(s), will depend on whether the funds will come from traditional IRA or Roth IRA, since both types of IRA accounts differ in terms of their respective required minimum distribution (RMD) rules. Lets say the funds are coming from a Roth IRA, b/c a Roth IRA is not subject to the same RMD rules as a Traditional IRA, then the distribution will not be subject to tax, since you are taking post-tax money, thus the only tax consequence you would be subject to is if you subsequently sold the Roth IRA-funded real estate treated for investment puposes per your question, and that is dependent on the nature and situation surrounding the use of the purchased real estate. However, if the funds for the real estate investment venture comes from a traditional IRA, then that distribution is a taxable event plus also being subject the RMD rules of traditional IRA as well as rules for early withdrawl of traditional IRA funds, depending on your age when you withdraw funds from the traditional IRA. In short, it will depend on what type of IRA the funds are coming from, the nature of the real estate investment, and age at time of IRA distribution. I hope this helps eyanine
