A: All income generated by a property or the sale of a property owned by your IRA must return to your IRA to retain the tax-deferred or tax-free status of the investment.
Rental payments are sent to Equity Trust Company for the benefit of your IRA. The checks or money orders are titled, “Equity Trust Company Custodian FBO Account Name/Account Number IRA.” Once received, the checks or money orders are deposited into your account. All checks must be sent directly to Equity Trust Company and include a payment coupon.
To sell a property, you need to request the original documents from Equity Trust. This is done by completing a Sale Direction of Investment form. Once the property has been sold, all funds from the sale must be sent directly to Equity Trust for the benefit of your IRA. This ensures maintenance of the tax-free/deferred environment. These funds will need to be sent with a payment coupon stating what asset the payoff is for.
(Source: ETC Res RE QS)
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