My custodian asked me a question about IRA-owned land I can't answer

The chainsaw thing is the part I genuinely didn't know until I read this. So if a pipe bursts in an IRA rental at 11pm I can't go turn the water off myself?

$2,600 gross minus $600 brush minus custodian fees minus whatever the county filing costs is basically zero income for fifteen years. You've bought an appreciation bet and put it in a tax-deferred wrapper. The wrapper does nothing for you if there's no income to shelter, and a traditional IRA turns your eventual gain into ordinary income on withdrawal instead of long term capital gain. Have you compared that to just holding the land personally?

marlow that last point stopped me. I assumed IRA was always better tax-wise. Is that a general thing or specific to land?

rigging it's general to traditional IRAs. Money comes out as ordinary income regardless of what it was inside. Roth is different, that comes out tax free if the rules are met. For a low-yield long-hold asset where most of the return is the eventual gain, the comparison against a taxable long term capital gain rate is worth running with someone who does this for a living before you close.

hollow, on the neighbor: I'd stop the driveway favor and pay him for it, or find someone else to plow. Not because I know it crosses a line, I don't, but because the whole point of this vehicle is that you never want to be explaining a gray area to anyone. Cheap insurance.

Who signs the lease is the custodian or the IRA as owner, with you directing. You don't sign it in your own name. My custodian was clear that they process what I send them and don't review whether it's allowed, which I found unsettling at first.

Walk. Zero net yield for fifteen years with mandatory paid labor on a parcel you could maintain yourself in an afternoon is you paying a premium to make your own asset worse. Land inside an IRA works better when the land does nothing and needs nothing.

quarry that's the cleanest framing in the thread. Does that mean unimproved land with no frontage and no ag program is actually the better IRA asset even though it sounds worse?

plumb, from what breaks on my buildings, yes, roughly. Anything that generates a maintenance obligation generates a compliance surface, and inside an IRA every maintenance obligation costs cash from an account with a contribution cap. My small multifamily would be a nightmare in an IRA for exactly that reason.

hollow, the ag assessment renewal is the piece I'd chase hardest before closing. Ag classification rules and who is allowed to file the renewal vary state by state, and in some places the beneficial arrangement is tied to the owner of record actively farming or leasing to a qualifying operator. If your state's rule assumes an individual owner and your owner of record is a custodian FBO your IRA, find out now what the assessor does with that. Losing the ag rate would change your tax line and your whole yield.