Buying a peace of Bear Land with IRA

If i Pull xx,xxx amount of money out of IRA and Purchase bear land with it. Will I have to pay income taxes on that amount that was withdrawn? Or would it be considered an investment?



I assume you are referring to vacant land, but this is treated as any other taxable IRA distribution. You would purchase the land and the cost is your cost basis for reporting any gain or loss on eventual sale of the land. Conversely, you could establish a self directed IRA with a SD IRA custodian and purchase the land within your IRA. If you did that there would be no current tax, but you would have to be very careful to avoid prohibited transactions. Property taxes on the land would have to paid from that IRA account, and you could not use the land for any personal purposes such a building a cabin or even camping on it.



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