FAQ Category: Real Estate

According to the IRS, a Mortgage note must be made for value and cannot be a gift or for free.

No, different percentages can be permitted so long as the note is for more than the amount being borrowed.

No. This is potentially considered a prohibited transaction, per Internal Revenue Code 4975. You may not purchase a property or an interest in a property that is currently owned by any disqualified party. Per IRS Publication 590: disqualified parties include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of a lineal descendant), and more.

You can purchase real estate directly through your IRA account, have real estate transferred from an existing IRA or roll it over from a qualified plan. It may also be acquired by your IRA account as a result of a foreclosure on a mortgage or deed of trust which is currently held within your IRA account.

Yes. Digital Trust will hold direct title to real property, in addition to interests in Limited Liability Companies (LLC) or Limited Partnerships (LP) that hold title to real property; notes secured by trust deeds/mortgages; and interests in Real Estate Investment Trusts (REITs).

Your IRA account is buying the property and not you as an individual. Therefore, it must be titled as follows: “Digital Trust FBO: Account holder name and Account Type”. All documents related to the purchase of the property such as the contract/purchase agreement, title commitment/insurance, liability insurance, etc. must be titled accordingly.