From Yahoo Finance: 2025-05-19 08:00:00

Jack and his wife want to transfer five senior homes in their self-directed IRAs worth $1.75 to $2 million total to their sons after they die, but new IRS rules require beneficiaries to withdraw the entire value within 10 years.

The SECURE Act of 2019 changed IRA beneficiary rules, requiring non-spouse heirs to fully withdraw assets within 10 years of the original owner’s death, impacting self-directed IRAs with real estate.

Beneficiaries of IRAs must take the full value within 10 years of the original owner’s death, requiring withdrawals to satisfy RMDs if applicable, potentially complicating the distribution of real estate assets.

For those with SDIRAs that include real estate, the transfer to beneficiaries is treated as a taxable distribution, requiring careful planning to ensure liquidity for tax obligations.

In-kind transfers of real estate from SDIRAs to beneficiaries are taxable distributions, necessitating financial planning, tax advice, and coordination with the custodian to manage the tax liabilities.

Ensure your will reflects your asset distribution wishes, update it after life events, and simplify transfers using designations like “transfer on death” to avoid probate.

Brandon Renfro, CFP®, advises on personal finance and tax topics, offering financial planning insights on handling complex asset transfers like real estate in SDIRAs.

SmartAsset and Yahoo Finance may earn commission or revenue through links in the content.

Read more: We Own Millions in Real Estate Through Self-Directed IRAs. How Do We Transfer it to Our Sons?