Bank Statement for a Real Estate IRA
A real estate IRA holds investment property inside a self-directed IRA, where all rental income and expenses must flow through the IRA — never your personal accounts. Bank statements are the compliance backbone, documenting that every dollar of rent, repair, and tax stayed within the IRA to preserve its tax-advantaged status. This guide covers what to track.
Key Benefits
- Documents rental income flowing back into the IRA, not to you personally
- Tracks property expenses paid from IRA funds for compliance
- Supports the annual fair market valuation the custodian requires
- Provides evidence against prohibited transactions that disqualify the IRA
How It Works
- Step 1: Ensure all property income and expenses route through the IRA-owned account
- Step 2: Download the IRA account bank statements documenting rent and expenses as PDFs
- Step 3: Convert them to Excel with Bank Statement Converter to organize income and costs
- Step 4: Provide the records to your custodian for valuation and to your CPA at year-end
Frequently Asked Questions
- How does a real estate IRA work?
- A self-directed IRA buys and holds investment property; all rental income returns to the IRA and all expenses are paid from it, preserving the account's tax-advantaged treatment.
- Why must all income and expenses flow through the IRA?
- Because the property is IRA-owned, mixing in personal funds is a prohibited transaction that can disqualify the entire IRA — bank statements prove the separation held.
- Can I personally do repairs on my real estate IRA property?
- No — doing work yourself (sweat equity) is generally a prohibited transaction. Repairs must be paid from IRA funds to third parties, which your statements document.
- Does a real estate IRA pay taxes?
- The IRA generally defers tax, but debt-financed property can trigger UBIT (unrelated business income tax) — bank statements help calculate any UBIT owed on the leveraged portion.
Convert Your Real Estate IRA Statements