topic Re: Self directed IRA in Retirement tax questions

Self directed IRA

rege7007 — Mon, 16 Sep 2019 19:11:11 GMT

purchased an investment property (residential) in 2017, renovated and sold in 2018. The asset was purchased through a self directed IRA that was established in 2016. Received a 1099-S form from the title company at time of settlement. How do I report this on my 2018 tax return (extension approved) since there is no tax consequence.

Re: Self directed IRA

dmertz — Mon, 16 Sep 2019 23:06:25 GMT

Was the property titled in the name of your IRA and does the Form 1099-S indicate that your IRA is the transferor?

Did you do any of the renovation work on the property yourself?

Did you pay for any of the renovation work with funds not held in your self-directed IRA?

Re: Self directed IRA

rege7007 — Tue, 17 Sep 2019 01:46:18 GMT

1. Yes, property titled as " Equity Trust Co Custodian FBO Karen Ege IRA" The Form indicates that the IRA is the transferor. However, the transferor's TIN was left blank & Karen provided her SSN .( PROBLEM?) 2. Did no renovation work. 3. Did not pay for any renovation work outside of self-directed IRA What Next??

Re: Self directed IRA

macuser_22 — Tue, 17 Sep 2019 02:34:36 GMT

Since gains or losses within a IRA are not reportable then nothing next. The 1099-S tells the IRS that it is in an IRA.

Just keep all records for work done and payment records in case the IRS ever questions it. The IRS usually audits within 3 years but can take up to 7 years. I would keep the records forever.

Re: Self directed IRA

Critter — Tue, 17 Sep 2019 12:22:09 GMT

Her SS# should not be on the 1099-S form ... the IRA should have it's own EIN to use for this situation ... and since this was done inside an IRA the closing company should NOT have issued a 1099-S at all.

Re: Self directed IRA

dmertz — Tue, 17 Sep 2019 13:16:26 GMT

I agree with macuser_22.

This Form 1099-S has nothing to do with your individual tax return, so it should not be entered into TurboTax. If it was entered, delete it.

The correct TIN for this Form 1099-S is the TIN of the IRA. Prior to closing, the filer of the Form 1099-S should have sent a Form W-9 or a written statement asking for the TIN of the IRA, which is required by law to be provided, so a TIN should have been obtained for the IRA prior to closing and provided to the filer. A Form 1099-S with a blank TIN might be problematic.

I don't think that the transferor being an IRA makes the transferor an exempt transferor that would make the filer exempt from filing Form 1099-S. Even in the case of an exempt transferor, the filer is not prohibited from filing Form 1099-S.

Re: Self directed IRA

rege7007 — Tue, 17 Sep 2019 13:08:45 GMT

Thanks